Ed Bernard leaned across the table, I receive five to ten contacts every day from people offering me good location opportunities, most of them claim to have found the perfect spot. He gave a broad smile then continued, I always ask them two questions. Have you been to my stores? Not store, but stores. Have you visited the Max 10 website? Bernard did not say, but it was clear that the vast majority of the real estate brokers who contacted Bernard were not able to answer yes to these two fundamental questions. It was also apparent that Bernard welcomed these contacts since each carried the potential seed of a successful business opportunity. In fact, the growth strategy of the retail division of Bermo Enterprises, the company of which Bernard was owner and President, depended on his ability to opportunistically recognize locations that held such promise. Looking down at his crowded corner desk, surrounded by baseball memorabilia and miniature Porsches, Bernard shuffled through four site descriptions that a broker had forwarded a few weeks before. Through hard work and despite the odds, Brandon Ricciardi, an associate at Vernick & Associates, had finally gained access to Bernard. After over a year of persistent calling, Ricciardi had convinced Bernard that he could track down a suitable site for the next Max 10 store. Together they had toured four locations and it was time for Ed Bernard to decide where to open his new store.

Any retail business must carefully decide where to position new stores as location would have a significant impact on future success. In general, the two most important factors for store success were product and customer. The key was finding a location that contained a sufficient customer base attracted to the type of products offered. Many other factors, however, also influenced the potential success of the retail business. It was crucial to understand the customer since choosing a region, city, or even a specific neighborhood, required thorough research of location demographics. The type of product constrained possible locations; a convenience store required easy access while a specialty store might fit inside a mall, or perhaps close to other similar stores. Other considerations were accessibility, visibility, and amount of traffic at the site. Of course, space and building parameters were important too; rent, maintenance, utility, taxes, and marketing costs needed to match the business requirements. Each retail business would necessitate a slightly different mix of all these factors and other issues and circumstances surely played a role as well. Bermo Enterprises retail division, and especially the Max 10 store, considered a wide array of factors when seeking out a new location.

Demographic factors were crucial, and meticulous research had to be done since the demographic picture changed across a city and between neighborhoods. We look for a good demographic mix, using the 3-mile radius, a 5-mile radius is too far, Bernard explained. Number one is a proper mix of ethnicities we gotta have a mix. I would not go into a store location with an all-white base, or quite frankly, with an all-black base. Im looking for a mix, white-black-Hispanic, but with at least 40-50 percent black or Hispanic, any combination is ok. These are rules of thumb that have changed over time as Bernard acknowledged, There are exceptions to this rule. Our Paw Paw, MI, store is in an 80 percent white location, but it is still doing ok. But that is an old store; I would not place a store there today.

CASE STUDY QUESTIONS

1. As an operation manager, please propose a layout and location planning for Max 10? (10 marks)
2. Which evaluation method will best fit MAX 10, please explain the application of the chosen Method to MAX 10? (10 marks)
3. Describe how any three of the OM activities impacts the management of both the goods that MAX 10 sells and the services that it provides. (10 marks)