Five Rooftops, One Family and a Market in Motion: An Environmental Scan of a Regional Auto Dealership Group Facing Online Buying, Electric Vehicles and a Technician Shortage
[Student Name]
University of Phoenix
MGT/526: Managing in a Changing Environment
Week 1 Assignment
[Instructor Name]
[Date]
The dealership group, employees and figures are a composite written for a model paper.
A composite family-owned dealership group operates five stores, which the industry calls rooftops, in a Midwestern metropolitan area of about 900,000 people: franchised Ford, Toyota, Chevrolet and Hyundai dealerships and a stand-alone used-vehicle center. Founded 62 years ago by the current president's grandfather, it employs about 410 people and sold about 11,000 new and used vehicles last year, with revenue of about $520 million. As at most dealerships, the service and parts departments produce a large share of gross profit, while new-vehicle sales generate traffic and trade-ins. The group's sales process has changed little in decades: commissioned salespeople negotiate prices with each customer, and a finance and insurance manager then sells loans, service contracts and other products. The group is profitable, respected and well run by the standards of the past, and that is exactly why its leaders underestimate how quickly the standards are changing. This paper scans the external forces that will require the group to change.
Why Scan the Environment
Organizations change when a gap opens between what their environment demands and what they deliver. Cawsey et al. (2020) argue that leaders must understand the external forces driving change before they can make the case for it inside the organization, because employees who do not see the pressures will not see the need.
Political and Legal Forces
Most states have franchise laws that require new vehicles to be sold through independent franchised dealers, limiting manufacturers' ability to sell directly to consumers. These laws protect the group's model, but they are under pressure: some electric vehicle makers sell directly in many states, and several manufacturers have experimented with agency models and online ordering in which dealers deliver vehicles for a fee. Federal and state rules on advertised prices and add-on products have also tightened, and regulators have focused on hidden fees in auto sales.
Economic Forces
Vehicle prices and interest rates both rose sharply after 2020. Higher rates raise monthly payments, reduce affordability and put pressure on finance income, a major profit source. Manufacturer incentives, inventory levels and the used-vehicle market swing with the economy and supply chains, so the group's profits are more volatile than they were a decade ago.
Social Forces
Customers increasingly research, compare prices and even complete purchases online before visiting a dealership, and many dislike price negotiation. Scott Morton et al. (2001) found that customers who used an online car referral service paid about 2% less on average than other customers, showing that online information shifts bargaining power toward buyers. Today's customers arrive knowing the invoice price and competing offers, and a sales process built on negotiation feels outdated to many of them.
Technological Forces
Two technologies matter most. The first is digital retailing: tools that let customers structure a deal, value a trade-in, apply for credit and schedule delivery online. The second is the electric vehicle. Rapson and Muehlegger (2023) describe how electric vehicle adoption depends on battery costs, charging infrastructure and policy, and note that electric vehicles have fewer moving parts and need less routine maintenance than gasoline vehicles. That threatens the service department, which earns much of its profit from oil changes, brakes and engine repair, while requiring new investments in charging equipment, high-voltage tools and technician training.
Environmental Forces
Fuel economy and emissions standards shape manufacturers' product plans, and they push electric and hybrid vehicles into dealer inventories whether or not local demand is ready. The pace is uncertain: federal consumer tax credits for new electric vehicles ended in 2025, and adoption in the Midwest has lagged coastal markets. The group must prepare for electric vehicles without overinvesting ahead of demand.
Labor Market Forces
Although not part of the standard framework, the labor market deserves separate attention. Qualified automotive technicians are scarce, and the group has eight open technician positions across its stores, limiting service capacity. Younger workers are also less drawn to commission-only sales jobs with long weekend hours, and the group's salesperson turnover exceeds 40% a year.
Ranking the Forces
The forces differ in impact and urgency. Rated high in both are online buying and customer dislike of negotiation, which affect every sale today, and the technician shortage, which limits the most profitable department now. Electric vehicles are high in impact but medium in urgency in this market: they will reshape service revenue over the next decade, but adoption locally is still modest. Interest rates and economic cycles are high in impact but largely outside the group's control; the response is financial resilience rather than organizational change. Franchise law changes are medium in both: worth monitoring but unlikely to change within two or three years.
Stakeholders the Forces Affect
The same forces land differently on each group inside and around the business. For salespeople, transparent pricing and online buying threaten the negotiating skill on which their commissions depend. For finance and insurance managers, rising rates and scrutiny of add-on products threaten the highest-margin part of each sale. For service advisers and technicians, electric vehicles threaten routine work in the long run, while the technician shortage makes their skills more valuable now. For the family owners, the forces raise the question of whether a fourth generation will inherit a business worth running. And manufacturers, who control franchise terms, inventory allocation and facility standards, will expect the group to invest in digital retail and electric vehicle readiness whether or not local demand justifies it. Understanding who gains and who loses from each force is the first step in anticipating where resistance will come from.
How Ready Is the Group?
A brief look inside the group suggests mixed readiness. Leadership is stable and trusted, finances are sound and the group has adapted before, adding a used-vehicle center when that market grew. But its systems, pay plans and job descriptions all assume the negotiated sale, and no one in the organization owns digital retail.
Implications for Change
The scan points to two changes the group should consider first: redesigning the sales process around transparent pricing and online tools, with a different role for salespeople, and rebuilding the service workforce through technician recruiting, training and pay. Preparing for electric vehicles is a third, slower change. The rest of this course will focus on the first: the most urgent change and the one that will meet the most resistance from people whose income and identity depend on the current process.
Conclusion
A successful, family-owned dealership group faces an environment changing on several fronts at once. Online buying and customer dislike of negotiation, a technician shortage and the slower arrival of electric vehicles are the forces that matter most, while franchise laws still protect its basic model. Scanning and ranking these forces shows that the group's most urgent change is to its sales process, which sets up the change management analysis in the weeks ahead.
References
Cawsey, T. F., Deszca, G., & Ingols, C. (2020). Organizational change: An action-oriented toolkit (4th ed.). SAGE.
Rapson, D. S., & Muehlegger, E. (2023). The economics of electric vehicles. Review of Environmental Economics and Policy, 17(2), 274-294. https://doi.org/10.1086/725484
Scott Morton, F., Zettelmeyer, F., & Silva-Risso, J. (2001). Internet car retailing. Journal of Industrial Economics, 49(4), 501-519. https://doi.org/10.1111/1467-6451.00160
How this MGT 526 Week 1 example is structured
The MGT/526 shelf page describes Week 1 as setting the organization and scanning the outside forces acting on it. The paper introduces the organization in enough detail that later weeks can build on it, then scans the environment with a standard framework. It ends by ranking the forces by impact and urgency, because a scan that treats every force as equal cannot tell leaders where change must start. Students search this week as MGT 526 Week 1, MGT526 Wk 1 or MGT/526 Wk 1; all three are the same assignment.
MGT/526 Week 1 questions, answered
What does MGT/526 Week 1 usually ask for?
The MGT/526 shelf describes Week 1 as setting the organization and scanning the outside forces acting on it. Many sections ask students to choose an organization that will be followed through the course and analyze the external forces driving change, often with a PESTEL or similar framework.
What is a PESTEL analysis?
A scan of the political, economic, social, technological, environmental and legal forces in an organization's external environment. It helps identify changes the organization does not control but must respond to.
Why rank environmental forces?
Because organizations cannot respond to everything at once. Ranking forces by their likely impact and how soon they will be felt shows which ones require change now and which can be monitored.
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