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

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.