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MGT 498 Week 3 Individual Assignment Environmental Scan Paper

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MGT 498 Week 3 Individual Assignment
Environmental Scan Paper
Environmental Scan: AAMCO Transmissions, Inc.
MGT 498 Week 3 Individual Assignment Environmental Scan Paper
Write a 1,050- to 1,400-word paper in which you complete the following:
Research and describe the internal and external environments of 2 to 3 real-world companies using
an environmental scan. Fill out the SWOT Analysis form provided by the instructor and attach it to
your paper.
Determine what competitive advantages each company has and what strategies each company is
using.
How does each company create value
MGT / 498
Environmental Scan: AAMCO Transmissions, Inc.
Aamco Transmissions, Inc. (ATI) is a national company that has a
majority of its store open and operating through a franchise network
of individual owners and operators. Currently the franchise chain has
approximately 750 open and operating stores, with about 5% (37) of
those being company run stores. Aamco Transmissions, Inc. offers a
wide variety of automotive services for retail sale, as well as a robust
National Fleet program for fleet management companies as well as
extended warranty organizations.
While ATI does offer a wide variety of automotive services, they are
better known for their expertise in the automatic transmission repair

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segment. Over the course of 50+ years of operating in the United
States and Canada, ATI has established themselves as the largest
transmission repair chain as well as an innovator with both
advertising and manner in which customers are handled.
Over the past 10 years, ATI has experienced a decline in transmission
repair services performed in their centers, nationwide. On average, the
average repair order size (dollar amount) has increase by 3% year
over year during that time, but the volume of transmission services
performed has continued to decline at a rate of 2% per year, on
average. The challenge for the franchise is to maintain the core
business model that has sustained the chain for over five decades
while continuing to provide the same type of profit margins that the
franchisee network has come to expect.
The current model that ATI has is to employ, in each center, a
transmission rebuilder who is capable of diagnosing and rebuilding
transmissions. However, with the continuing decline in transmission
revenue, year over year, the cost of employing such a specialized
technician has, or is, become too costly and is having a detrimental
effect on the bottom line for the lower volume centers. The reasonable
solution is to remove the high priced technician that is capable of only
a limited set of skills and replace it with a “universal” type of
technician. The problem then lies in the fact the centers would then be
unable to accommodate the transmission business and be forced to
abandon that high margin work.

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