home

The strategy of product development is important for the company to sustain the present business growth and bring the future drastic growth. It entirely depends on the executive decision-makeing. The present business never last forever because of the life cycles, changing market needs and competitors' breakthrough products. So companies must develop new products to survive in the future. Recent developments of information technologies such as the Internet and e-mail make the competition sverer and dynamic strategies for developing new products are necessary for the company to grow sustainedly and perpetualy.

One way to deal with this situation is to use real options. They can solve the dynamic problems of the companies and real human lives. Companies should write real options to cover developing costs and uncertain risks of the newly developing products. The buyers of the real options could get the preemptive rights for the new products. If the product development were successful, the premium prices of the real options would go up and the buyers could sell the real options, or exercise the preemptive right to get the new products. Executives are responsible for the dynamic strategy change of developing new products, depending on the expectations of the development results and market changes.