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Optionsmanagement in F&E: Eine Fallstudie

Author

Listed:
  • Onno Lint

    (Erasmus Universität Rotterdam und Technische Universität Eindhoven, EUR H16-02)

  • Enrico Pennings

    (Erasmus Universität Rotterdam und Technische Universität Eindhoven, EUR H16-02)

  • Martin Natter

    (Wirtschaftsuniversität Wien)

Abstract

Summary Benefits of incremental investments in R&D and new business initiatives are strongly future oriented and, therefore, coincide with large uncertainty. Market launch after the embryonic stages only takes place when conditions are favorable and is blown off when circumstances are poor. Such conditional investments lead to the problem of a complex economic evaluation for which the conventional methods of evaluation are inadequate. In this article, the authors elaborate on the options approach as derived from an analogy with financial options on stocks which offers a possible solution to this problem. The article originates in a current research project in the field of multimedia concerning the development of Optical Tape Recording at Philips Electronics. First, it is shown how a given set of numbers can be interpreted differently in an option-type analysis versus a conventional discounted cash flow analysis. All other things being equal, an option valuation adjustment to traditional capital budgeting leads to a fundamentally different conclusion. Second, the link between option valuation and strategy analysis is discussed and elaborated on.

Suggested Citation

  • Onno Lint & Enrico Pennings & Martin Natter, 1999. "Optionsmanagement in F&E: Eine Fallstudie," Schmalenbach Journal of Business Research, Springer, vol. 51(10), pages 990-1006, October.
    • Handle: RePEc:spr:sjobre:v:51:y:1999:i:10:d:10.1007_bf03371607
    DOI: 10.1007/BF03371607
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    References listed on IDEAS

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