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Environmental Scan Mgt 498

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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 known for their expertise in the automatic transmission repair 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

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