CBS Outdoor Americas: External and Internal Environment Analysis
This paper examines the external and internal environments of CBS Outdoor Americas Inc. (NYSE: CBSO), a leading Out-of-Home (OOH) advertising company operating across the United States, Canada, and Latin America. The analysis covers the general environmental segments most influential to the firm — specifically the technological and sociocultural segments — and applies Porter's Five Forces framework to identify the two most significant competitive forces: rivalry among competing firms and the threat of substitute products. The paper also evaluates strategic moves CBS Outdoor has made or could make to address threats and opportunities, including acquisitions, digital innovation, and support for small-to-medium advertisers. Strengths, weaknesses, resources, core competencies, and value chain considerations round out the analysis.
- Company Overview: CBS Outdoor Americas: CBS Outdoor's IPO, offerings, and market reach
- Influential General Environment Segments: Technological and sociocultural segments most influential
- The Most Relevant Forces of Competition: Rivalry among firms and threat of substitutes
- Strategy Regarding Competitor Rivalry and Threats of Substitute Products: Digital innovation and awards deter competition
- Strategic Moves to Address Threats and Opportunities: Internet threats and SME advertiser opportunities
- Resources, Capabilities, and Core Competencies: Locator tools, diversified OOH media, financials
- Value Chain Analysis: Value creation through R&D and design excellence
✍️ How to write this paper — guide, tools & examples ▾
What makes this paper effective
- Grounds abstract strategic frameworks in concrete, real-world examples — such as the Mercer University digital billboard campaign and the Peapod virtual grocery store initiative — making the analysis vivid and credible.
- Systematically applies Porter's Five Forces and general environment segment analysis to a specific company, demonstrating how theoretical tools translate into practical business insight.
- Balances internal strengths (recycling initiatives, digital capabilities, creative services) against genuine weaknesses (digital billboard safety concerns), avoiding one-sided advocacy.
Key academic technique demonstrated
The paper exemplifies applied strategic analysis: it selects the most relevant subset of a standard framework (two of five Porter's forces; two of six general environment segments) and justifies those choices, rather than cataloguing all elements superficially. This selectivity signals analytical judgment — a hallmark of strong business school writing at the undergraduate level.
Structure breakdown
The paper opens with a company profile, then works outward to macro-environmental forces before narrowing to competitive dynamics via Porter's Five Forces. A strategy section follows, linking analysis to recommended actions. The paper closes with an internal audit — resources, competencies, and value chain — moving from external context to internal capability, a logical sequence that mirrors standard strategic management frameworks.
Company Overview: CBS Outdoor Americas
CBS Outdoor Americas Inc. (NYSE: CBSO) leases advertising space in the category known as Out-of-Home (OOH) advertising throughout the United States, Canada, and Latin America (Ross Sorkin, 2014). CBS Outdoor went public in April 2014 and separated from CBS Corporation (NYSE: CBS.A and CBS) — the broadcaster and owner of Showtime — as the final step following its initial public offering (IPO) (Ross Sorkin, 2014). Shares of CBS Outdoor rose 18% since the IPO in March 2014 (Ross Sorkin, 2014).
CBS Outdoor offers a range of outdoor advertising options designed to target somewhat different markets: billboards, bus and railroad media, mobile billboards, specialty advertising signs, sports media, street furniture, and walls (Ross Sorkin, 2014). A specialty of CBS Outdoor is an extensive multimedia digital inventory across many of these markets, along with highly sophisticated mobile interactive capabilities that extend to all of its Out-of-Home media offerings (Ross Sorkin, 2014). The market reach of CBS Outdoor is wide, with displays in all 25 of the largest U.S. markets and in 180 other national and regional markets, including heavily trafficked locations (Ross Sorkin, 2014). Consider the Bay Bridge in San Francisco, Sunset Boulevard in Los Angeles, and Grand Central Station and Times Square in New York City — CBS Outdoor maintains a strong media presence in each of these locations (Ross Sorkin, 2014).
Influential General Environment Segments
The dimensions of the broader society that influence industries and the firms active within them are referred to as the general environmental segments. These segments include the demographic, economic, global, political/legal, sociocultural, and technological segments. The two segments of the general environment most likely to have the most substantive influence on CBS Outdoor Americas are the sociocultural segment and the technological segment.
The potential for the technological segment to influence the growth of CBS Outdoor Americas is readily apparent. Digital outdoor media is the most rapidly growing of the Out-of-Home advertising categories, and CBS Outdoor offers digital outdoor media in both full-motion and static formats. The current and future emphasis on digital media is a major factor in the company's business offerings and business plan. The sociocultural segment will also play a major role in shaping Out-of-Home advertising. All advertising formats are strongly linked to sociocultural changes and must unequivocally represent contemporary thought and cultural trends.
The Most Relevant Forces of Competition
Porter's Five Forces of Competition encompasses the following: (1) threat of new entrants; (2) bargaining power of suppliers; (3) bargaining power of buyers; (4) threat of substitute products; and (5) rivalry among competing firms. Of these five forces, the two most significant for CBS Outdoor are rivalry among competing firms and the threat of substitute products.
A number of external forces increase rivalry among competing firms. When numerous competitors exist — or when consumers cannot differentiate among competitors because they appear to be on equal footing — industry rivalry tends to increase. When an industry shows slower or declining growth, the strategic stakes become higher and competition intensifies. When exit barriers are high and prevent competitors from leaving the industry, or when high fixed costs or storage costs create a kind of fiscal inertia, rivalry increases because all companies must remain in the market. When switching costs are low and product or service innovations are frequent, consumers will shop for better deals among competitors.
One way for CBS Outdoor to undercut rivalry among competitors is to pursue a series of strategic acquisitions. CBS Outdoor has undergone rapid changes in recent years. In addition to its 2014 IPO, CBS Outdoor acquired Windor Outdoor, a move that added more than 35 billboard structures with more than 70 display faces in the Chicago metropolitan area (Ross Sorkin, 2014). On July 21, 2014, CBS Outdoor agreed to acquire the outdoor advertising business of Van Wagner Communications for $690 million in cash (Ross Sorkin, 2014). This acquisition included 1,100 large-format billboard displays in 11 large U.S. markets, which generated total 2013 revenue of $206 million (Ross Sorkin, 2014).
There is considerable speculation that CBS Outdoor will continue on the mergers and acquisitions path. In an interview with Dealbook in March 2014, CBS Outdoor chief executive Jeremy J. Male stated: "We will have a strong balance sheet, and we will have an interesting equity currency that we can use. I certainly imagine that, where there are businesses that add value to our strategy" (Ross Sorkin, 2014).
According to Dealbook of The New York Times, "outdoor advertising is a fairly fragmented market" (Ross Sorkin, 2014). The primary rivals of CBS Outdoor are Clear Channel Outdoor, JCDecaux, and Lamar Advertising (Ross Sorkin, 2014). Notably, Van Wagner reported that following CBS Outdoor's acquisition of its outdoor advertising division, Van Wagner would focus on promotions in its blimp and aerial division ("CBS Outdoor press," 2014). This is an important — if easily overlooked — statement. Outdoor advertising continues to morph into new forms, keeping pace with technological innovations and cultural trends.
The proliferation of ads on mobile digital device platforms exerts a strong pull on research and development in the outdoor advertising space. Indeed, outdoor advertising could one day come to mean only aerial and blimp forms of promotion, while multimedia mobile advertising, as a category, swallows outdoor digital advertising whole — thus creating an entirely fresh category of substitute product threats.
Strategy Regarding Competitor Rivalry and Threats of Substitute Products
The trend toward increased digital advertising use is a catalyst for new configurations and challenges in partnerships between advertisers and paid media buyers. Consider the collaboration between CBS Outdoor and Mercer University's partner billboards. Overnight, more than 20 billboards across Georgia and Alabama converted their digital displays to a live-feed campaign that transformed billboards into scoreboards during the game between the Mercer Bears and Duke ("CBS Outdoor press," 2014). A conversion of this scale would normally require five days to accomplish, but the overnight transformation became a social media sensation ("CBS Outdoor press," 2014). This lead in digital advertising allowed CBS Outdoor to co-opt mobile device and social media platforms. Replications of this type of effort could reduce the threat of substitute products — especially since it is the value consumers place on differentiated industry products that makes them a substitute threat. If CBS Outdoor can diminish the perceived value of competing digital platforms through continual innovation and by making its multimedia digital advertising seamless with other platforms, the company can deter customer switching and attract new clients.
Continuing to accumulate industry awards is another way to keep competition at bay and to sharpen the focus of competitive rivalry. Industry awards are coveted assets, particularly because they demonstrate that a company is engaged in cutting-edge innovation — a factor that matters for how customers differentiate products and services. In February 2012, for its work on New York's Penn Station Long Island Rail Road (LIRR) Digital Network, CBS Outdoor received the Silver Apex Award in the Transportation Category following nomination by Manufacturing Resources International (MRI) ("CBS Outdoor press," 2014). Presented during the Digital Signage Expo's DSE Apex and Content Awards Dinner in Las Vegas, the Apex Awards recognize "the execution of an exceptional digital signage technology installation" ("CBS Outdoor press," 2014). This was CBS Outdoor's second such honor; in 2013, the company received a Gold Apex Award for its work on New York's Digital Urban Panel Network.
Always verify citation format against your institution’s current style guide requirements.