Give an example of a "cash cow" products/services currently in the marketplace?Cash cows are low-growth, high -share businesses or products. These established and successful strategic business...
Give an example of a "cash cow" products/services currently in the marketplace?
Cash cows are low-growth, high -share businesses or products. These established and successful strategic business units (SBUs) need less investment to hold their market share. Thus they produce a lot of cash that the company uses to pay its bills and support other SBUs that need investments.
So-called "cash cow" products usually begin their lives as "stars," products whose share of a growing market grew quickly, which then generated significant proportions of the overall income for the production company. Then, as these markets slow down, if the products retain their large share of the market, they become "cash cows," or products which continue to generate huge amounts of income for their companies without requiring much further input from the production company in terms of advertising revenue or changes to the product. A good example would be Coca-Cola's original product, Coca-Cola itself. This product has had a large market share for over a century, and is also a good illustration of why recipe changes or amendments to a cash cow product are usually detrimental. When Coca-Cola did change the recipe for their product to "New Coke," in 1985, public backlash was enormous and forced a return to the original product.
Other examples of cash cows include long-established breakfast cereals like Kellogg's Corn Flakes or Captain Crunch.
One example of a cash cow in the present market, a product that has held this position for a very long time, is the washing powder Tide. Tide has been a cash cow for Proctor and Gamble, a product that was introduced a long time ago and is now a consistent revenue earner for the company with a very small amount needed for improvements in the product and its advertising. The revenue earned from Tide has helped P&G diversify into new product ranges and improve the other product ranges it is in that require considerably larger resources.