| Course | MGT 570 Advanced Strategic Management |
|---|---|
| Module | Module 5 |
| Paper type | MBA corporate strategy analysis |
| Length | About 1,073 words, 6 pages |
| Format | APA 7 student paper |
| School | Aspen University |
| Program | Master of Business Administration |
| Updated | October 2026 |
Free sample paper for MGT 570 Module 5
Radio, Indoor Screens or a Print Shop? Parenting Advantage and the Next Business for a Billboard Company
Student Name
Master of Business Administration, Aspen University
MGT 570: Advanced Strategic Management
Instructor Name
Month Day, Year
Radio, Indoor Screens or a Print Shop? Parenting Advantage and the Next Business for a Billboard Company
Natural State Outdoor, the composite Little Rock billboard company this course has followed, has a defined purpose, a focused business-level strategy for local advertisers and digital conversion under way. Its board, pleased with early results, is considering a second business. Three options have reached the board. Six radio stations in small Arkansas towns, mostly country and gospel formats, are for sale for about $11 million. An indoor digital screen network, placing screens in local restaurants, gyms, salons and clinics and selling time to local advertisers, would cost about $3 million to build over three years. And the vinyl printing company that produces most of Natural State's static sign faces is for sale for about $6 million. This paper evaluates the three.
Parenting Advantage
Goold et al. (1995) argued that corporate strategy should be judged by parenting advantage: whether the parent adds more value to its businesses than any rival parent could, and more than the businesses would achieve on their own. They warned that parents often destroy value by imposing the wrong systems or attention on businesses they do not understand, and that a good fit requires the parent's skills and resources to match the critical success factors of each business.
Questions Before Diversifying
Markides (1997) proposed six questions a firm should ask before diversifying. What can the company do better than any competitor in its current market? What strategic assets are needed to succeed in the new market? Can the company catch up to or leapfrog competitors there? Will diversification break up strategic assets that need to be kept together? Will the company be simply a player in the new market or a winner? And what can it learn by diversifying, and is it organized to learn it?
Does Corporate Strategy Matter?
Bowman and Helfat (2001) reviewed studies that decomposed variation in firm profitability into industry, business-unit and corporate effects. Although some early studies found small corporate effects, they concluded that corporate strategy does matter, with corporate effects meaningful in many samples once methods were considered carefully. The finding cautions against assuming that diversification decisions are neutral: they can add or subtract real value.
Testing the Options
| Test | Radio stations | Indoor screen network | Vinyl printer |
|---|---|---|---|
| Parenting advantage | No; radio programming and talent are not company skills | Yes; local selling and digital operations transfer | Little; printing is a commodity the company buys cheaply |
| Strategic assets needed | Programming, on-air talent, broadcast licenses | Screen operations, local sales relationships, content tools | Printing equipment and skills |
| Can the company catch up or lead | Unlikely against radio groups | Yes; few local competitors | No advantage over printers |
| Breaks up core assets | No | No; strengthens them | No |
| Winner or player | Player | Potential winner | Player |
| Learning value | Low | High: indoor audiences and data | Low |
Recommendation
Natural State should build the indoor screen network and decline the radio stations and the printer. The screen network uses the company's core competence in local selling, its digital operations from billboard conversion and its new ordering system, offering small advertisers a package of roadside and indoor messages. The company should start with 150 screens in Little Rock and expand only if occupancy reaches 60% within a year.
The Indoor Network in Practice
Small advertisers in the pilot often asked whether they could also reach people who were not driving, such as diners waiting for a table or people in a gym. Placing screens in 150 local businesses would answer that request, with the host businesses receiving free messages and a share of revenue. The same ordering platform would sell both billboard and indoor time, so a bakery could buy a morning on a highway board and an evening on screens in nearby restaurants. Operations would draw on skills the company is already building: content scheduling, screen maintenance and local selling.
Costs and Returns
The network would cost about $20,000 per location group of ten screens, or $3 million for 150 screens with software and installation. At 60% occupancy and current pilot prices, it would earn about $1.6 million a year, paying back in roughly three years. The radio stations, at $11 million, would earn more revenue but at margins radio specialists achieve and the company likely would not.
Risks of the Screen Network
Host businesses may close or move, screens may be damaged and patrons in a restaurant may pay little attention to ads. The pilot will place screens only in businesses open at least five years and will measure attention with simple sensors before expanding. If indoor audiences prove too distracted to recall messages, the company will stop at the first 150 screens.
Why Not Radio
The radio stations would add revenue and local reach, but the company would be a newcomer in an industry with its own skills: programming, talent management and audience ratings. Goold, Campbell and Alexander's warning applies: the parent would likely subtract value by applying billboard systems to a different business.
What the Company Would Learn
Markides's last question, what the company can learn, favors the screen network. Indoor screens will teach the company how audiences respond to messages at different times and places, data it can use to price and sell billboards better. Radio would teach little that applies to outdoor advertising, and printing nothing new.
Why Not the Printer
Owning the printer would secure supply, but the company already buys vinyl at competitive prices from several suppliers, and digital conversion will reduce its need for printed faces.
Effect on the Core Business
Diversification can distract managers from the business that pays the bills. The indoor network shares the same customers, sales team and platform as the billboard business, so it reinforces the core rather than competing for attention. The radio stations would have required a separate management team and a new set of advertiser relationships, pulling the president's time away from the digital conversion that matters most in the next three years.
Conditions for Proceeding
The board will fund the first 150 screens only if the billboard digital conversion stays on schedule, and will expand beyond Little Rock only if occupancy reaches 60% and at least a third of indoor advertisers also buy billboard time.
Conclusion
Parenting advantage, Markides's questions and Bowman and Helfat's evidence point to one option. The indoor screen network extends what the company does well, while radio and printing would make it bigger without making it better.
References
Bowman, E. H., & Helfat, C. E. (2001). Does corporate strategy matter? Strategic Management Journal, 22(1), 1-23. https://doi.org/10.1002/1097-0266(200101)22:1<1::AID-SMJ143>3.0.CO;2-T
Goold, M., Campbell, A., & Alexander, M. (1995). Corporate strategy: The quest for parenting advantage. Harvard Business Review, 73(2), 120-132.
Markides, C. C. (1997). To diversify or not to diversify. Harvard Business Review, 75(6), 93-99.
Reading the MGT 570 Module 5 assignment instructions
Corporate strategy, which businesses to own and how a parent adds value to them, is the focus of Module 5 in Aspen's MGT 570. Papers commonly evaluate diversification, acquisition or integration options for a company. Base your work on the classroom's Module 5 prompt; the example continues the billboard company studied earlier. Describe each option with figures such as price, revenue and cost to build. Explain research on how corporate parents add value and when diversification succeeds, using the original sources. Test each option against those ideas, applying the same tests to all. Consider the effect on the core business and on management attention. Recommend a path, with conditions and measures.
Inside the MGT 570 Module 5 example
Natural State Outdoor has $58 million in revenue and a focused strategy for local advertisers. Six radio stations in small Arkansas towns are for sale for $11 million; an indoor screen network in restaurants, gyms and clinics would cost about $3 million to build; and its vinyl supplier is for sale for $6 million. Goold, Campbell and Alexander's Harvard Business Review article argues that corporate strategy should seek parenting advantage, adding more value than rival owners. Markides's Harvard Business Review article asks what the firm can do better than competitors in a new market and whether its strategic assets transfer. Bowman and Helfat's Strategic Management Journal review concludes that corporate effects on profitability exist. A table rates each option. Radio fails because the company cannot run stations better than radio specialists; the printer fails because owning it adds little; indoor screens pass because local selling and digital operations transfer directly.
Where the marks sit in the MGT 570 Module 5 rubric
Readers of a corporate strategy paper want to know whether the parent would actually make each business better, so this kind of analysis rests on testing that claim rather than citing synergy. This example uses Goold, Campbell and Alexander's parenting test to ask exactly that. Markides's questions bring in strategic assets and learning, which are easy to overlook when a deal looks attractive on revenue. Bowman and Helfat's evidence justifies taking corporate choices seriously. The table applies the tests to all three options, the recommended option is costed and the recommendation includes conditions for proceeding, such as an occupancy target before expansion.
Common MGT 570 Module 5 mistakes, and how to avoid them
Diversification papers often justify a move by pointing to synergies without explaining what the parent adds. Ask whether the company would run the new business better than its current or alternative owners. Another weakness is ignoring the core business; consider whether diversification would distract from it. Use research on corporate strategy. Apply the same tests to every option. Estimate costs. Finally, set conditions under which the recommendation would change, such as a price ceiling or a pilot target. Estimate costs and returns for the option you recommend.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Aspen University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
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MGT 570 Module 5 questions, answered
What does MGT 570 Module 5 usually ask for?
Aspen's MGT 570 covers corporate-level strategy in this module, so an MBA paper evaluating diversification or acquisition options for a company is typical. Read your classroom prompt.
What is parenting advantage?
Goold, Campbell and Alexander's idea that a corporate parent should add more value to a business than any other owner could.
What should a company ask before diversifying?
Markides suggests asking what it can do better than competitors in the new market, which strategic assets it needs and whether it can acquire or build them.
Where can I find a free MGT 570 Module 5 sample paper?
The paper above weighs radio, indoor screens and a print shop as next businesses for a billboard firm and backs the screens.
Does corporate strategy affect profitability?
Bowman and Helfat's review concluded that corporate-level effects on profitability are real, so corporate choices matter.