Environmental Scan Mgt 498 Essay

1100 Words Jan 27th, 2014 5 Pages
Environmental Scan: AAMCO Transmissions, Inc.
Thomas Scotti
MGT / 498
January 27, 2014
Dr. Chris Mendoza

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
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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.
Senior management has considered offering, to the franchisees, a remanufactured transmission to help offset the cost and liability of having an in house rebuilder. These transmissions would be produced in a rebuilding facility that ATI would purchase and ship the units directly to the franchisees on an as needed basis. These units would be sold at cost to the franchisees (plus a small amount to cover cost of possible warranty issues). While the overall cost of unit (including the parts and labor) would be similar to the current process, it removes the variable expense of the rebuilder’s salary and allows the cost of unit to become a fixed cost.
What has to be considered is what competition exists in the wholesale market that the franchisees may consider as an alternative. Currently, there are several players in the national market that could and do compete in that field. The first competitor is Jasper Engines and Transmissions (Jasper) based out of Indiana. Jasper has been in business for several decades and is renowned for their quality and warranty offerings. A second company is Engine and Transmission Exchange (ETE) based out

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