Pricing and currency exposure
Pricing by market and margin defence against currency movement, with hedging alternatives to review with your bank, in a memo built for your board or investors.
Who it is for
Companies selling in more than one currency that watch their margin move for reasons they neither control nor measure.
Main deliverable
- Pricing structure by market
- Quantification of the currency exposure
- Hedging alternatives to review with your bank
- A working model with the assumptions in plain sight
- A memo built for your board or investors
Detail
A company that builds its price with the logic of its home market and invoices in dollars does not have a pricing problem. It has an open currency position nobody decided to take, and which shows up in the year-end result as though it were bad luck.
What it covers
The starting point is separating two things usually discussed together that are not the same: what your product is worth in each market, and what happens to that price when the exchange rate moves. The first is a commercial decision; the second is an exposure that can be measured.
The exposure gets quantified: how many points of margin are lost under movements of different magnitudes, over what horizon, and across what share of revenue. A number, not a feeling.
On that basis the alternatives are built: differentiated pricing by market, adjustment clauses, currency matching between revenues and costs, and the financial hedges worth reviewing with your bank. Each with its cost made explicit.
The model is delivered open, with the assumptions in plain sight, so the company can run it again when conditions change.
Alongside the model comes a memo written to be read by a board or an investor: what was decided, on what assumptions, and what happens to the margin if those assumptions move. The model proves the argument; the memo is the argument.
Related reading
A 30-minute call, at no cost.
To understand your objective and confirm whether we can add value. If we move forward, the diagnostic begins within 10 business days of the proposal being accepted.