Title: Managerial flexibility quantification under competition threat in information–communication technology investments

Authors: Georgios N. Angelou, Anastasios A. Economides

Addresses: Information Systems Department, University of Macedonia, Egnatia 156, Thessaloniki 54006, Greece. ' Information Systems Department, University of Macedonia, Egnatia 156, Thessaloniki 54006, Greece

Abstract: In this paper, we estimate the value of an Information–Communication Technology (ICT) investment opportunity, modelled as a real option, when there is competition threat that can influence its value negatively or even eliminate it. We put our analysis in the revenue management concept, which is a very real concern for ICT service providers across the globe, especially after the increase of competition as a result of markets| liberalisation. The target is to maximise revenue level and minimise risk that influence business profitability. Finally, we apply our model to a real life e-learning case study showing how it can be formulated and solved.

Keywords: competition modelling; competition threat; information technology; communications; ICT investment; investment evaluation; real options; revenue management; flexibility quantification; e-learning; online learning.

DOI: 10.1504/IJRM.2007.015540

International Journal of Revenue Management, 2007 Vol.1 No.4, pp.388 - 408

Published online: 26 Oct 2007 *

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