Luxura Inc.is a large cosmetics company that made an initial small investment in a start-up company,GreenDream,that was developing an organic face lotion.This gave Luxura controlling interests in the start-up company.However,GreenDream soon began to have financial difficulties because of principal-agent problems.As a result,Luxura did not invest in the next stage of development and pulled out of the company.This approach to strategic alliance is referred to as a

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A real-options perspective to strategic decision making breaks down a larger investment decision into a set of smaller decisions that are staged sequentially over time. This approach allows the firm to obtain additional information at predetermined stages. At each stage, after new information is revealed, the firm evaluates whether or not to make further investments.