Microsoft's Flexibility (Chapter 8)

 Ch. 8 - Flexibility: Real Options Analysis Under Risk and Uncertainty

This chapter focuses on a firms ability to change direction quickly and cheaply given unanticipated changes in a competitive situation.

Microsoft's Types of Flexibility:

• Option to Defer:
• Microsoft uses leases that span from 1 year to 20 years for datacenters, corporate offices, research and development facilities, retail stores, and certain equipment. This allows for potential explorations rather than purchasing.
• Option to Expand:
• Microsoft's personal computing segment is especially flexibly with the option to expand. Microsoft will start by selling a computer or program, then will expand with software or accessories based on how successful that segment is.