The surge of innovation in information technology at the end of the twentieth century reduced the cost of communications, which facilitated the globalisation of the production and capital markets. Globalisation has in turn spurred competition and consequently innovation. Sustainable competitive advantage is an increasingly difficult proposition in this environment, which raises a number of issues for organisations: how to create and manage value, how to improve an organisation's capabilities to respond and adapt, how to manage the effect of competition on industry structures and how to foster and manage innovation. In response to these issues one concept is having an impact and influence on organisations. Real options, a form of advanced financial analysis, apply financial options theory to real assets. The concept offers a framework that can link value to risk and uncertainty, and the ability to manage the strategic opportunities that lie in an increasingly dynamic environment.