Abstract The formulation of strategic plans within the real options framework promotes flexibility and provides an answer to critics of conventional strategic planning who argue that the deterministic and inflexible nature of that process might leave managers ill‐prepared to cope with uncertainty. Although the merits of adopting real options as a way of thinking on a theoretical level are well documented, little, if any, guidance is given on how the proposed theoretical framework can actually be put into action by management to produce more flexible strategic plans. This paper attempts to incorporate the real options framework into existing strategic tools that are widely used by managers such as SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. Copyright © 2007 John Wiley & Sons, Ltd.