Peugh Advisory
Engagements → Case Study
Platform Value Creation

Regional Auto Group

Four-store regional dealership platform operating corporate infrastructure with store-level process autonomy. $3.8M annual GP variance identified across locations. Analysis validated against NADA and Foureyes benchmarks, stress-tested via Monte Carlo simulation.

$3.8M
Annual GP Variance
480%
Expected Year 1 ROI
100%
Prob. Positive Return
Overview

The platform operated corporate infrastructure—shared services, executive oversight, centralized G&A—while maintaining store-level operational autonomy. This configuration incurred platform costs without generating corresponding operational leverage. Processes varied by location. Best practices remained localized.

The variance appeared process-driven rather than market-driven: four stores on a shared campus, with common traffic and demographics, operating at Hours/RO from 1.47 to 2.08 and close rates from 7.1% to 11.7%.

Key Findings
Fixed Operations: $1.8M Recovery
Hours/RO variance of 41% between best and worst performers (1.47 to 2.08). One store operating at NADA benchmark provided internal proof of achievability. Recovery calculated bottom-up: gap hours × RO volume × effective labor rate.
Variable Operations: $2.0M Recovery
Close rate variance from 7.1% to 11.7% against Foureyes benchmark of 12.4%. Two stores already near benchmark, demonstrating achievability within market conditions. 13% target represents modest stretch beyond industry average.
No Organizational Standard
No documented processes for core workflows. Employees trained at one location required retraining to transfer. Process improvements remained localized. Institutional learning accumulated at store level rather than organization level.
Integration Capacity Constraints
With acquisition activity under consideration, each deal under current model would introduce additional process variance and integration requirements. Standardization prior to acquisition establishes the integration target.
Methodology

Bottom-up variance analysis from trailing twelve-month store performance data. Benchmarks validated against NADA Slide Guide 2025 (Hours/RO) and Foureyes 2025 Benchmark Study (close rates). Implementation costs sourced from Indeed, Salary.com, NCM Institute, and vendor quotes.

Monte Carlo simulation with 10,000 iterations using triangular distributions. Capture rates: 40–60–85% Fixed Ops, 35–55–75% Variable Ops. Cost variance: -10% to +25%. Time to value: 6–9–18 months. Sensitivity analysis identified capture rates as primary outcome drivers (~$800K swing each).

Full Analysis
16-page memorandum with implementation roadmap, Monte Carlo model, and source documentation.
Download PDF