BROWSE

Harvest Strategy

What is a 'Harvest Strategy'

A harvest strategy is a business plan for reducing or altogether eliminating investment in a particular product, brand or line of business due to a company's management determining the required expense to attempt to boost sales any further would not be justified by likely future revenues from the product or brand line. A harvest strategy typically results when a product or brand line has reached cash cow status, the stage of product maturity beyond which a product is unlikely to show any significant sales growth from continued investments in sales and marketing. The term "harvest strategy" describes the process whereby a company intends to harvest the profits from a cash cow in order to fund investment in development or sales and marketing efforts for other products with more promising sales growth potential.

Explaining 'Harvest Strategy'

Companies commonly utilize the profits from established brands or product lines to fund the marketplace development of new brands or of existing products perceived to have high growth potential. As an example of a harvesting strategy, the Coca-Cola company might choose to reduce investment in marketing its established soda brand in order to devote funds to sales and marketing efforts designed to promote its line of energy drinks. Another common harvest strategy plan is one employed by a pharmaceutical firm when it determines that an established medication it sells has reached the point of market saturation, can be used as a cash cow, and that a more productive investment of capital is to use the profits from that product to fund research and development or marketing efforts for other medications.

An Alternative Meaning of Harvest Strategy

The term harvest strategy is also used in regard to equity investments, where it refers to a proposed plan for investors, such as venture capitalists or private equity investors, to reap the profit from their investment. Two common harvest strategies for equity investors are either a plan to sell the company invested in to another company or to make an initial public offering (IPO) of company stock.


Further Reading


Optimal harvest strategy for slash pine plantations: the impact of autocorrelated prices for multiple products
academic.oup.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

Reconciling approaches to the assessment and management of data-poor species and fisheries with Australia's harvest strategy policyReconciling approaches to the assessment and management of data-poor species and fisheries with Australia's harvest strategy policy
www.tandfonline.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

Health economic impacts and cost-effectiveness of aflatoxin-reduction strategies in Africa: case studies in biocontrol and post-harvest interventionsHealth economic impacts and cost-effectiveness of aflatoxin-reduction strategies in Africa: case studies in biocontrol and post-harvest interventions
www.tandfonline.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

To grow or to harvest? Governance, strategy and performance in family and lone founder firmsTo grow or to harvest? Governance, strategy and performance in family and lone founder firms
www.emerald.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

Financial viability of Penaeus setiferus versus Penaeus vannamei with continuous live harvesting and one final harvest strategies in South CarolinaFinancial viability of Penaeus setiferus versus Penaeus vannamei with continuous live harvesting and one final harvest strategies in South Carolina
dc.statelibrary.sc.gov [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

Incorporating social objectives in evaluating sustainable fisheries harvest strategyIncorporating social objectives in evaluating sustainable fisheries harvest strategy
link.springer.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

Economic and financial analysis of harvesting and utilization of river reed in the Okavango Delta, BotswanaEconomic and financial analysis of harvesting and utilization of river reed in the Okavango Delta, Botswana
www.sciencedirect.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

Dual-track versus single-track sell-outs: An empirical analysis of competing harvest strategiesDual-track versus single-track sell-outs: An empirical analysis of competing harvest strategies
www.sciencedirect.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

Mixed forests and a flexible harvest policy: a problem for conventional risk analysis?Mixed forests and a flexible harvest policy: a problem for conventional risk analysis?
link.springer.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …

A concept for the calculation of financial losses when changing the forest management strategyA concept for the calculation of financial losses when changing the forest management strategy
www.sciencedirect.com [PDF]
… of a maximum rotation age T; namely, the plantation will be harvested once it … Results Optimal Harvest Strategy Our numerical results indicate that, because pulpwood and sawtimber prices are … an ob- served price of one product is high enough to motivate harvesting depends on …


Q&A About Harvest Strategy


What is cash cow status?

Cash cow status is when a product has reached maturity beyond which it is unlikely to show significant sales growth from continued investments in sales and marketing.

What are some other terms used for harvest strategies?

Other terms include harvesting profits, harvesting revenue, and harvesting value. Harvesting profits refers specifically to companies with large amounts of excess capital that can be invested elsewhere while still maintaining their current level of profitability; this term may also refer more generally to companies that are making money but whose stock price has not increased significantly over time. Harvesting revenue refers specifically to companies whose products are nearing obsolescence; these companies must either find new markets for their products or move on entirely because they cannot continue selling their existing products at profitable prices without substantial investment in research and development (R&D). Harvesting value refers more generally to all three types of harvest strategies described above.""

How do you know if your company has reached cash cow status?

If your company has reached cash cow status, then it will have shown no significant growth for an extended period of time.

How do harvest strategies work?

The seller will purchase an item at a low price and then resell it for more money once it becomes outdated.

What does a harvest strategy entail?

A harvest strategy entails reducing or eliminating investment in a product due to management's determination that the required expense to attempt to boost sales any further would not be justified by likely future revenues from the product.

Are there any disadvantages to using a harvest strategy?

Yes, there are many disadvantages such as being unable to get rid of items you no longer want or need. Also, if the product does not become obsolete quickly enough you may be stuck with it for too long before you can sell it again.

In what stage of maturity does cash cow status occur?

The stage of maturity beyond which a product is unlikely to show any significant sales growth from continued investments in sales and marketing.

What is a harvest strategy?

A harvest strategy is the practice of selling products that are about to become outdated.

Why would someone use a harvest strategy?

Someone might use this type of strategy because they can make money off of something that is no longer useful to them or others.

Who uses harvest strategies?

Harvest strategies are used by people who sell electronics, cell phones, and other similar products.

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