Investment Strategy of the Enterprise in Unstable Economic Environment: Real Options Method
Abstract
The problem of modernization and development of business is put on the front burner amid the deteriorating economic environment. In these conditions there appear new management tools allowing to build flexible corporate strategy. In recent years real option approach (ROA) integrating investment, financial, strategic analyses, current experience and managers’ expertise has become such a tool. The author shows advantages of real options method. It permits to make decisions at planning and execution stages of a project, to stop or suspend project in deteriorating economic situation and to increase output and expand business for higher profits in economical advance. The case study shows peculiar features of real option for withdrawal from business. The definition and the scheme of a package of options are provided. Application of options package is of greater importance for low efficiency projects realized in the conditions of unstable economy with dim business outlook and fluctuation of markets.
DOI 10.14258/izvasu(2015)2.1-22
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