What should a business do with a cash cow based on the BCG matrix?

In the context of the BCG matrix, a cash cow is a business unit or product that generates significant cash flow due to its strong market position and low growth in the industry. The primary characteristic of a cash cow is that it requires minimal investment to maintain its market position, while providing substantial profits that can be strategically utilized elsewhere in the company.

Utilizing the profits from a cash cow to fund other areas of the business is a strategic approach because it allows the company to leverage existing resources to support growth in other units or invest in new opportunities, possibly in high-growth areas identified as question marks or stars. This strategic allocation of funds enables the business to maximize its overall market potential and balance its portfolio.

Investing heavily to expand market share, while a common strategy for growth-oriented products, is not typically aligned with the characteristics of cash cows, which are expected to deliver return on investment with lower risk and minimal further investment. Additionally, increasing marketing expenses to maintain status would likely not be necessary, as cash cows are already leading their market. Divesting to avoid market saturation does not align with the objective of capitalizing on the steady cash flow that cash cows provide.