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As indicated in the preceding chapter, our research builds on concepts that have been developed in previously unlinked areas. We therefore have to draw on different strands of literature that can be subsumed under the following categories: new product development, decision models with information updating, and real options theory.
This chapter surveys these literature strands and reviews the relevant concepts and theories. We start with the literature on new product development, providing an overview of key development project characteristics as well as the success factors identified by empirical studies. Thereafter, decision models with information updating possibilities are reviewed. Besides giving an overview of the relevant information updating modeling approaches, we study corresponding decision frameworks developed in different areas of operations management and discuss their applicability to our research objective. Finally, the key concepts of real options theory are presented, including different valuation methods and insightful frameworks for research and development applications.
KeywordsReal Option Call Option Underlying Asset Product Concept Market Uncertainty
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