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What is a Cash Cow?

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A cash cow is a profitable mature product that is generating a steady cash flow. The term implies a market leading product that has a low growth rate. In many cases, cash cows are legacy products with a slowly declining market share.

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
A profitable mature product that is generating steady cash flows.
An analogy to a dairy cow that produces daily milk.
Related Concepts
Next: Types of Product
More about product development:
Brand Development
Competitor Analysis
Critical To Customer
Customer Analysis
Customer Needs
Design Considerations
Design Principles
Design To Value
Early Adopters
Feasibility Study
Figure Of Merit
Latent Need
Market Fit
Market Research
Moment Of Truth
Naive Design
Packaging Design
Product Analysis
Product Culture
Product Design
Product Functions
Product Marketing
Product Metrics
Product Planning
Product SWOT
Proof Of Concept
Sensory Analysis
Social Features
Target Market
Time To Market
More ...
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