In the portfolio matrix, what is a 'cash cow'?

A 'cash cow' in the portfolio matrix refers to a business unit that generates excess cash. This term is part of the BCG (Boston Consulting Group) matrix, which categorizes business units based on their market growth and share. A cash cow has a high market share in a mature industry with low growth. Because it commands a strong position, it generates more cash than is needed to maintain the business.

This excess cash can then be utilized to fund other areas of the business that might need investment, such as new product development or marketing efforts for units considered to be 'question marks' or 'stars' in the matrix. The defining characteristic of a cash cow is its ability to create more revenue than it consumes, making it crucial for the overall financial stability and growth strategy of a company.