Outline Executive Summary

Animations 1 and 2 provide an overview and close the gap between traditional corporate
finance and strategic planning by linking corporate strategy to the market value of the
firm. We can assess the value of a company through the expanded valuation criterion,
which is now able to capture the value of the firm’s strategic growth options.
Animations 3 and 4 help us to understand the role of real options in measuring
and explaining strategic growth option value. Real options theory quantifies decision
making under uncertainty and stresses the importance of decision flexibility in investment
opportunities.
Animations 5 and 6 address the strategic component of a firm’s growth option value.
Game theory is essential for our understanding of strategic decisions in a competitive
environment. We integrate real options and game theory into option games. Practical
examples of option games are plenty and include: Competitive bidding in acquisitions and
new product development decisions (in car manufacturing, mobile phones and consumer
electronics).

Animations
Corporate Valuation

• Improving your decision making

Corporate Strategy

• Where value comes from

Real Options

• The value of flexibility

• Real options are everywhere

Corporate Valuation

• The value of strategic commitment

• Option Games: Integrating flexibility and strategic commitment