acme-home-improvements-inc-was-founded-in-1982-in-raleigh

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Case Background:

(Acme Management Plan)

Acme Home Improvements, Inc. was founded in 1982 in Raleigh, North Carolina, USA. By 2009 the company had 125 stores along the US East Coast from Florida to Maine. Its annual sales are currently ~$5,400,000,000 with $280,000,000 net income. The average store is about 100,000 square feet with an additional 10,000 square feet of outside garden center. The stores typically carry 40,000 different products from 5,000 vendors worldwide. Major US competitors include Ace, Home Depot, Lowe’s and TruValue.

There are five major product groups within each Acme store: plumbing and electrical supplies, building materials, hardware and tools, seasonal and garden/yard items, and paint, flooring and wall coverings.

Each store has a store manager, assistant store manager, bookkeeper, an information systems manager and an assistant, a manager for each of the five major product groups, customer service employees on the store floor to assist customers with their purchases, cashiers, receiving/stocking employees, and maintenance/janitorial employees.

In the interest of seeking greater profits and buffering against downturns in the US market, Acme has determined to follow Home Depot and other competitors to Canada and Mexico. In the latter, it has established, in accordance with Mexican law, a joint venture with local interests, known as Acme Home Improvements de México, SA de CV (“Acme de México” or “Acme Mexico City”). (SA de CV = Sociedad Anónima de Capital Variable, a Mexican corporate form.)

Acme de México has purchased a site on which it intends to build and open the new store in Mexico City [Acme Mexico City (AMC)]. In addition to the average 100,000 square feet of indoor space and 10,000 square feet of exterior space for garden products, a two-story parking garage will be built directly adjacent to the store. It is desired that the project should take no longer than 12 months. The store construction and opening processes include at least eight major activities:

Obtain required licenses and permits.

Prepare the site and lay the foundation.

Build the walls, floor and roof of the structure.

Install electrical and plumbing fixtures.

Finish interior and stock inventory.

Build the garage.

Complete all paving and landscaping.

Hire and train employees.

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