Cash Cows as a Problem
Cash cows can be incredibly profitable as they may pay out for decades or longer after product development costs have been recouped. Cash cows can be problematic as all the cash they are generating tends to attract plenty of competition. Investors expect firms to grow profits or at least maintain their sales. As such, replacing cash cows that are in decline with new cash cows is a problem for some firms. Generally speaking, cash cows are hard to come by.Large firms may use cash cow money to develop new products or buy smaller firms that are on their way to developing cash cows.| Overview: Cash Cow | ||
Type | ||
Definition | A profitable mature product that is generating steady cash flows. | |
Origin | An analogy to a dairy cow that produces daily milk. | |
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