Feed the cash cow

Windows, Coke Classic and iPhone are cash cows for Microsoft, Coca-cola and Apple respectively. What cash cows provide is the ability for these companies to fuel innovation and launch new products. Consider Microsoft as an example. The company keeps fueling innovation in new products like XBox and Bing while at the same time putting in a lot of effort in feeding the cash cows they own as their flagship products–Windows and Office.

It is very important to keep feeding the cash cow. Every company out there wants to have an iPhone or Windows in their product portfolio, so the key here is to maintain the market dominance for these products. You cannot afford to take your foot off the accelerator when it comes to developing and marketing these products. Product development, innovation, advertising and support for cash cows should always be maintained.

Feeding the cash cow doesn’t mean missing the innovation cycle or sticking to something that can be replaced by a better and more useful product by your competition. Cash cow for your company may evolve or completely change over time. You may start with something as the biggest revenue generator for your company and change it to something completely different. Take Apple for example. Apple evolved its cash cow from iPod to iPhone pretty seamlessly. On the other hand, consider Kodak. The company completely missed the digital camera innovation cycle fearing the cannibalization of its cash cow (35mm camera) and eventually losing the leadership position in the camera market.

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