Information Management

Topics: Strategic management, Strategy, Investment Pages: 3 (401 words) Published: September 12, 2013
38

The Milking strategy creates and supports a cash cow business.

Variants of Milking Strategies:

 A Fast Milking Strategy; would be disciplined about minimizing the expenditures towards the

brand and maximizing the short-term cash flow, accepting the risk of a fast exit.

 A Slow Milking Strategy; would sharply reduce long-term investment but continue to support operating areas such as marketing and service.

 A Hold Strategy; would provide enough product development investment to hold a market

position.

Conditions favouring a milking strategy:

 The Business position is weak but there is enough customer loyalty.

 The business is not central to the current strategic direction of the firm, but has relevance to

it and leverages assets and competencies.

 The demand is stable or the decline rate is not excessively steep.

 The price structure is stable at a level that is profitable for efficient firms.

 A milking strategy can be successfully managed.

An advantage of the milking strategy is that it can be reversed.

A risk of the milking strategy is that if employees and customers suspect that a milking strategy is

being employed, the resulting lack of trust may upset the whole strategy.

The Hold Strategy

The hold strategy can be a long-term strategy to manage a cash cow, or an interim strategy

employed until the uncertainties of an industry are resolved.

A problem with the hold strategy is that, if conditions change, reluctance or slowness to reinvest may

result in lost market share.

Prioritizing and Trimming the Brand Portfolio

Reasons to prioritize brands and trim brand portfolio:

1. The exercise provides a good way to prioritize the business portfolio because the brand will usually represent a business. The brand is usually a key asset of the business and represents

its value proposition. Thus, a recognition that the brand has become weak can be a good...
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