Page 65 - BA1 Integrated Workbook STUDENT 2018
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Position and gap analysis
Real options
An alternative or choice that becomes available with a business
investment opportunity. Real options can include opportunities to expand
and cease projects if certain conditions arise, amongst other options.
There are three main types of real option to be aware of:
option to follow on – a project may allow the organisation access to
other, more lucrative projects in the future
option to abandon – an organisation may be able to exit the project
if it becomes unfavourable
option to delay – an organisation may be able to delay starting a
project until conditions are more favourable.
Illustrations and further practice
Now review TYU 10 and 11 in Chapter 6 of the text.
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