URGENT PLEASE ANSWER THE QUESTION FOR THIS CASE STUDY

Q1. What strategy would you adopt to manage cash cows for this company and why?

Penwood Incorporated Research and Development Lab were formed in 1908 and soon developed a new signal lantern: Permanent lanterns on poles are used to signal trains about the operational status of the track ahead, sometimes with color gels in front of the light to signify stop, etc. for communicating on railroads. Penwoods area of expertise; the lantern would not break even if it was hot on the inside (from the bright light) and cold on the outside (from ice).

Penwood spends $ 2million per day on R & D, and is currently faced with the dilemma of deciding which ideas deserve the time and Penwoods dollars. The choice its makes is critical. Guess right, and profits and market share rise. Guess wrong, and losses pile up and people lose their jobs. For example, Penwoods cash cow product optical fiber (one glass optical fiber can carry 5 million phone conversations at once) accounts for 40 percent of its total revenue. But with the news of an impending telecom sector crash, does it make sense to spend millions more on optical fiber research given that sales have slowed so much? On the other hand, if Penwood de-emphasizes research on optical fibers, it will lose ground to its competitors, 5 to 10 years from now?