Here are the guidelines for the Molto Delizioso (MB) foreign exchange case:
* Financial Analysis: you need to analyze the current situation’s (BREXIT, Covid-19 impact, elections, potential exchange rates movements, etc…) impact on your product’s price, number of units sold, and profitability under three FOREX rate scenarios (1.05,1.18, and 1.30 UK pounds to euro exchange rate). This should be 1-2 pages.
* Recommendations: short-term (2022) and long-term (2023 – 2026). What should MB do (be specific — not vague “let’s partner” answers? How will BREXIT, COVID-19, and other factors, affect them? Use the FOREX rate assumptions I gave you to look at the three scenarios (1.05, 1.18, and 1.30 UK pounds to euro exchange rate). Be sure to compute the impact on their sales using the elasticity information given in the case. This is a real-life situation. Be creative and use all the business knowledge you have gained in the last 4 years to develop your recommendations. This should be 2-3 pages.
* BREXIT: by the way, the UK exited the EU on December 31, 2020.There have been some delays with customs but so far the overall impact has seemed minor. However, no one knows what is going to happen in the future. As a businessperson you need to make a decision based on your best guess of what will happen in the future. This is real life — many, many times you have to make business decisions with incomplete information and an unclear environment.
* COVID-19: to add to the uncertainty and confusion, we are in the midst of a global pandemic that has done massive damage to the economy in both UK and Italy. How will this affect MD’s decision? Will this have an impact on your recommendations for MD? If so, explain how it will affect them.
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