IRM provides an optimized portfolio of capability options while maintaining the value of strategic flexibility. This approach identifies risky projects and programs while projecting immediate and future cost savings, total lifecycle costs, flexibility alternatives, critical success factors, and portfolio optimization, while controlling for cost overruns and schedule delays. Integrated Risk Management (IRM) incorporates risks, budget constraints, reallocation options, and total ownership costs in recommending a defensible path forward. The Strategic Real Options approach helps answer these questions, and more, by estimating the value of strategic flexibility in a common and objective way across various alternatives and expressing the return on investment (ROI) of each option.These ROI estimates across the portfolio of alternatives provide the inputs necessary to predict the value of various options for accomplishing the firm’s goals such as risk hedging and reduction, and profit maximization. How much is a platform technology really worth when its initial costs are high and it is delivered with lower than desired initial capabilities, but with the potential for significant flexibility for future add-ons? Should the organization build, buy, or lease a new untested technology? Is running a proof of concept a better strategy than executing large-scale acquisitions immediately a better strategy? How is a firm’s capability extended with flexible manufacturing systems? Is a modular open architecture really worth the added costs?
REAL OPTIONS VALUATION FOR GREEN PROJECTS FULL
Strategic Real Options is a discipline that incorporates this learning model and permits the decision maker to take advantage of the full range of options, whereas traditional analyses that neglect this strategic flexibility will grossly undervalue certain capabilities, projects, and strategies. When uncertainty becomes resolved through the passage of time, actions, and events, decision makers can make the appropriate midcourse corrections by applying the knowledge gained and making decisions along flexible strategies. Understanding the knowledge inherent in and accounting for the effects of these uncertainties is crucial to successful management. Real-life conditions are fraught with uncertainty and risks. Comments Off on THE BASICS OF REAL OPTIONS.
0 kommentar(er)
