Molto Delizioso practices focused cost leadership business-level strategy. The company is competing on the bases of prices in a saturated market where by the currency volatility has hugely affected the running of the business following the Brexit vote.
Customer centric business strategy involves establishing a customer experience during and after sale services to increase the chance of return clients. Molto Delizioso do not practice this business strategy as they are more focused on making profit and surviving in the inflated market where other companies offering same services are competing including Fracino which makes its products locally, thus not affected by the currency fluctuation occurring after the Brexit vote.
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Post-Brexit income statement (Annualized) assuming exchange rate £ 1.00= € 1.16
| Per Unit | Quantity (Units) | € | £ | |
| Sales in U. K | £200 | 40,000 | 8,000,000 | |
| U.K costs | ||||
| Contract labor (variable cost) | ||||
| Import of coffee machines (invoiced at €90 each) | € 90 | 40,000 | 3,600,000 | 3,103,448 |
| Marketing and distribution cost (assumed to be fixed costs) | 400,000 | |||
| Other fixed costs: Overheads, Interest, Depreciation, Rent, Salaries etc. | 500,000 | |||
| Profit (U.K subsidiaries) | £ 3,996,552 Or € 4,636,000 | |||
Elasticity= 
Let % change in quantity demanded be X
1.1= 
thus, X= 1.1×17.5 = 19.25%
For price elasticity of 1.1, there will be a decrease in demand by 19.25%
× 40,000 = 32,300 units sold annually
income statement (Annualized) assuming exchange rate £ 1.00= € 1.16
| Per Unit | Quantity (Units) | € | £ | |
| Sales in U. K | £235 | 32,300 | 7,590,500 | |
| U.K costs | ||||
| Contract labor (variable cost) | ||||
| Import of coffee machines (invoiced at €90 each) | € 90 | 32,300 | 2,907000 | 2,506,034 |
| Marketing and distribution cost (assumed to be fixed costs) | 400,000 | |||
| Other fixed costs: Overheads, Interest, Depreciation, Rent, Salaries etc. | 500,000 | |||
| Profit (U.K subsidiaries) | £ 4,184,466 Or € 4,853,981 | |||
Elasticity=
When elasticity is 0.8
0.8 = thus, X = 17.5×0.8 which is 14.
This means that when the price elasticity is 0.8, the demand will drop by 14%
Thus 
× 40,000 = 34,400 units
income statement (Annualized) assuming exchange rate £ 1.00= € 1.16
| Per Unit | Quantity (Units) | € | £ | |
| Sales in U. K | £235 | 34,400 | 8,084,000 | |
| U.K costs | ||||
| Contract labor (variable cost) | ||||
| Import of coffee machines (invoiced at €90 each) | € 90 | 34,400 | 3,096,000 | 2,668,966 |
| Marketing and distribution cost (assumed to be fixed costs) | 400,000 | |||
| Other fixed costs: Overheads, Interest, Depreciation, Rent, Salaries etc. | 500,000 | |||
| Profit (U.K subsidiaries) | £ 4,515,034 Or € 5,237,439 | |||
Montague should choose the 3 rd scenario, whereby the price elasticity is 0.8. this way, despite the fact that the demand will drop slightly, he will still be able to make profit as perceived by the headquarters.
The Italia headquarters perception is that, regardless of the change in currency volatility, the company should always make a profit.
