Cash cow
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A cash cow is business jargon for a business venture that generates a steady return of profits that far exceed the outlay of cash required to acquire or start it. Many businesses attempt to create or acquire such ventures, since they can be used to boost a company's overall income and to support less profitable endeavors. [2] Since the business unit can maintain profits with little maintenance or investment, a cash cow can also be used to describe a profitable but complacent company or business unit.
The BCG growth-share matrix developed by the Boston Consulting Group uses the term "cash cow" to describe business units experiencing high market share and operating in a mature industry.
Origins
The term cash cow originates from the farm, where farmers would have a "milch cow" that was kept for its steady supply of milk. [3] Peter F. Drucker is credit for being the first to introduce the word to the world of business consulting in the 1960s with his book, The Frontiers of Management [4]
References
- ^ Apple Reports First Quarter Results, Apple Inc., 2007-01-17. Retrieved on 2007-02-17.
- ^ Investopedia (http://www.investopedia.com/terms/c/cashcow.asp)
- ^ Merriam Webster (http://www.merriam-webster.com/dictionary/milch%20cow)
- ^ Drucker, Peter F. The Frontiers of Management. New York: Truman Talley, 1986.