GPS, Inc.: A Case of Investment under Uncertainty
Darren Hudson, Lisa House, Barry J. Barnett, Murat Işık · Review of Agricultural Economics · 2004
Johnny Williams, president of Global Positioning Solutions, Inc., is considering entering the market for providing remotely sensed imagery and associated prescriptions to farmers. A large initial investment is required and additional investments will be needed if the business expands. Johnny is faced with trying to predict demand for a product that is not currently available in his market area. The case prompts students to discuss the trade-off between losing "first-mover" advantage versus the potential value of waiting for additional information in a highly uncertain market demand.