Analyse the relationship between the product life cycle and cash flow :: Economics

Analyse the relationship between the result life cycle and property devolveThe output life cycle is split into 5 spirit levels* Research and development* Introduction* Growth* Maturity/Saturation* winnow outThe carrefour life cycle is the model that represents a sales mouldfor a mathematical product over a period of time. It shows the revenue by a productfrom is introduction to its eventual decline. There are quartet stages tothe product life cycle Introduction, growth, maturity and decline.Research and development is the starting signal stage of the product life cycle.This is where a crocked has a look team look in to possible new ideasand products for a business. This atomic number 50 be very expensive for the firm.No income is made at this stage as there is no revenue coming in tothe firm but capital being paid out on resources. The cash flow atthis stage is very low.Introduction This is the point when the product life cycle begins.This is when the actual product is launched and does not include scrutiny or research and development. Manufacturers at this stage spenda mussiness of notes in order to create awareness. The cash flow at thisstage would not be very positive. A lot of money has been spent at theintroduction to get the public to notice the product and to make themaware. The firm would not expect to make any network at this stage asthe product has just been launched.Growth If the product succeeds, sales will grow. Prices could stillbe uplifted but with change magnitude competition prices will drop. The producerstill advertises at a high level to fight off competition. Productstarts to move into profitability. The cash flow starts to gain morerevenue.Maturity Sales growth begins to slow as market saturation isapproached. Sales are kept going by those who are late to adopt newproducts. This stage will outlast longer than the earlier stages. This iswhere the most revenue is taken in for the perennial period of time.This is where th e cash flow reaches its peak but also at the point ofsaturation starts to decrease. To stop the revenue and the productgoing toss off at the point of saturation maybe the firm could give theproduct a new identity and maybe a new advertizing campaign.Decline Eventually the product will become less enkindle forpurchasers, and the decline of the product will commence.