Option Value and Entry Timing  

Oleh:

Miller, Kent D. ; Folta, Timothy B.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Strategic Management Journal vol. 23 no. 7 (2002), page 655-665.
Topik: VALUES; option value; entry timing; preemption; flexibility

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: SS30.9 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

When facing uncertainty, firms entering new markets can make initial foothold investments rather than undertake large sunk investments. Such investments are real call option purchases. They offer management flexibility, but also raise questions about whether and when to increase commitment to new markets. We present an entry timing decision criterion and discuss its application to a variety of market entry situations. Optimal timing for exercising real options depends on current dividends, possibilities for preemption, and whether the option is simple or compound, proprietary or shared. Our analysis reveals critical assumptions and new theoretical insights regarding market entry timing.

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