Assignment:
1. What is Molto Delizioso's business-level strategy? Note that Five business-level strategies are discussed.
2. What is a customer centric business strategy? Is Molto Delizioso's strategy customer centric?
3. Recalculate Molto Delizioso's income statement under 3 scenarios, using post-Brexit exchange rate £ 1.00= € 1.16, assuming no change in fixed costs and change in variable costs only in terms of volume or quantity sold.
Scenario 1: Calculate profits in both £ and €
Scenario 2: Assume UK subsidiary increases its price to UK buyers by £ 235 per unit. Assume consumer price elasticity is 1.1. Calculate profits in both £ and €.
Scenario 3: Assume consumer price elasticity is .8. Again, calculate profits in both £ and €.
Which of the 3 scenarios should Montague choose?
What is the perspective of the Italian headquarters?