CHAPTER FIVE
ENVIRONMENTAL AND STRATEGIC ANALYSES
I felt a great disturbance in the Force.
—Obi Wan Kenobi, Star Wars
You can't stop the waves, but you can learn to surf.
—Jon Kabat-Zinn, MD, founder of Mindfulness-Based Stress Reduction
Marketing without data is like driving with your eyes closed.
—Dan Zarrella, social media scientist
Thomson Corporation, in 1997, was a Toronto media company that owned 55 daily newspapers that were doing well.1 CEO Richard Harrington, however, observed several trends in the environment that caused him to move the firm away from newspapers. He anticipated the Internet was going to undercut classified advertising and cable television and the Internet were going to steal readers. Despite the fact that the company was profitable, he made the rather dramatic decision to divest newspapers and to move the firm into delivering information and services online to the law, education, healthcare, and finance industries. That decision allowed Thomson to thrive today while other newspaper-based firms are struggling. The decision was based on projecting and acting on environmental trends.
The focus in this chapter changes from the market to the environment surrounding the market. Being attentive to these broader environmental trends can have a make-or-break effect on companies. The rapid rise of the App Store and mobile technologies was critical to the entry success of 2009 startup WhatsApp and set the stage for it to gain 500 million active users by 2014, ultimately resulting in its acquisition by Facebook for $19 billion.2 On the other hand, a government regulation requiring new product labels can be the death knell for a small food company that must expend a large percentage of its profits to comply. External events can help or hurt companies of all sizes. The goal is to identify and evaluate trends and events that will affect strategy either. Getting in front of emerging trends also allows the firm to prepare strategies to defend itself against threats or, as Thomson did, to neutralize them.
This chapter begins by examining environmental analysis. This broad topic is also covered in other strategy and strategic planning courses. Therefore, the focus here will be on trends emerging from technology, culture, business, government, and the economy that have implications for the market. Given an understanding of trends, the firm can move into three types of analysis: (a) impact analysis, which will help assess the relative importance of threats facing the firm; (b) scenario analysis, which will help the firm assess the meaning and impact of different environmental events; and (c) SWOT analysis, which compares environmental threats and opportunities with firm strengths and weaknesses to derive strategic actions.
ENVIRONMENTAL ANALYSIS
Environmental analysis is by definition very broad and casts a wide net to catch different stakeholders and trends that may have implications for the firm. As a practical matter, the analysis r.
CHAPTER FIVEENVIRONMENTAL AND STRATEGIC ANALYSESI felt a great.docx
1. CHAPTER FIVE
ENVIRONMENTAL AND STRATEGIC ANALYSES
I felt a great disturbance in the Force.
—Obi Wan Kenobi, Star Wars
You can't stop the waves, but you can learn to surf.
—Jon Kabat-Zinn, MD, founder of Mindfulness-Based Stress
Reduction
Marketing without data is like driving with your eyes closed.
—Dan Zarrella, social media scientist
Thomson Corporation, in 1997, was a Toronto media company
that owned 55 daily newspapers that were doing well.1 CEO
Richard Harrington, however, observed several trends in the
environment that caused him to move the firm away from
newspapers. He anticipated the Internet was going to undercut
classified advertising and cable television and the Internet were
going to steal readers. Despite the fact that the company was
profitable, he made the rather dramatic decision to divest
newspapers and to move the firm into delivering information
and services online to the law, education, healthcare, and
finance industries. That decision allowed Thomson to thrive
today while other newspaper-based firms are struggling. The
decision was based on projecting and acting on environmental
trends.
The focus in this chapter changes from the market to the
environment surrounding the market. Being attentive to these
broader environmental trends can have a make-or-break effect
on companies. The rapid rise of the App Store and mobile
technologies was critical to the entry success of 2009 startup
WhatsApp and set the stage for it to gain 500 million active
users by 2014, ultimately resulting in its acquisition by
Facebook for $19 billion.2 On the other hand, a government
regulation requiring new product labels can be the death knell
for a small food company that must expend a large percentage
of its profits to comply. External events can help or hurt
2. companies of all sizes. The goal is to identify and evaluate
trends and events that will affect strategy either. Getting in
front of emerging trends also allows the firm to prepare
strategies to defend itself against threats or, as Thomson did, to
neutralize them.
This chapter begins by examining environmental analysis. This
broad topic is also covered in other strategy and strategic
planning courses. Therefore, the focus here will be on trends
emerging from technology, culture, business, government, and
the economy that have implications for the market. Given an
understanding of trends, the firm can move into three types of
analysis: (a) impact analysis, which will help assess the relative
importance of threats facing the firm; (b) scenario analysis,
which will help the firm assess the meaning and impact of
different environmental events; and (c) SWOT analysis, which
compares environmental threats and opportunities with firm
strengths and weaknesses to derive strategic actions.
ENVIRONMENTAL ANALYSIS
Environmental analysis is by definition very broad and casts a
wide net to catch different stakeholders and trends that may
have implications for the firm. As a practical matter, the
analysis requires discipline to make sure that it does not become
an out-of-control fishing expedition that occupies time and
generates reports, but provides little real insight and actionable
information.
Although environmental analysis has no bounds with respect to
subject matter, it is helpful to provide some structure in the
form of five broad areas of inquiry that are often useful:
demographics, culture, business and technology,
government/policy, and economic trends. The exact areas that
should be monitored will vary depending on the business. For
example, monitoring science developments will be critical to a
pharmaceutical company but not important to a home-delivery
food service. Exactly which parts of the external environment
should be monitored is the first decision a company makes, and
it should be revisited as the business changes.
3. Customer Trends
Customer trends can present both threats and opportunities.
They have helped create fortunes for those companies able to
take advantage of these trends and driven out less the fortunate.
These trends can emerge out of the sheer force of demographics
or involve more profound cultural shifts. The following sections
discuss recent demographic, cultural, and business and
technology trends occurring in customer markets.
Demographic Trends
Demographic trends can be a powerful underlying force in a
market and can be predictable. Among the influential
demographic variables are age, income, education, geographic
location, and ethnicity. Consider the demographic shifts
described in Figure 5.1.
Aging. The world population is aging more rapidly due to
decreased fertility rates and people's tendency to live longer. In
2015, 8.5 percent of the world's population of 617 million
people were aged 65 or older. The share of the population over
age 65 is expected to continue to grow, hitting 12 percent in
2030 and 17 percent in 2050.3 This effect is expected to be even
more dramatic in the United States with 20 percent of the U.S.
population expected to be older than 65 by 2030.4
Changing Ethnic Mix. The United States is projected to become
more racially and ethnically diverse in the coming decades due
to both birth rate and immigration. Today, 14 percent of the
U.S. population was born outside of the country, as opposed to
merely 5 percent in 1965. By 2060, the non-Hispanic White
population is expected to decrease from over 50 percent of the
nation's population to just 44 percent, and no ethnic group is
predicted to have a majority share of the U.S. population. The
population of those who identify as two or more races is
projected to be the fastest growing over the next five decades,
with the Asian population and Hispanic population being the
second and third fastest-growing groups. By 2060, more than
one-quarter of the U.S. population is projected to be Hispanic.5
Women in the Labor Force. Since the 1960s, American women
4. have increasingly participated in the labor force and the gender
pay gap has decreased. In 2011, 40 percent of households with
children reported that the mother was the primary breadwinner.
While the proportion of women in political and business
leadership positions has risen, it remains small compared to that
of their male counterparts.6
Shifting Family Structures. The marriage rate has been
declining for decades, and the number of households with two-
parents is declining in the United States. Simultaneously,
divorce, remarriage, and cohabitation rates are increasing. The
stereotypical roles of mothers and fathers are converging, in
part because of the rise in the proportion of breadwinner
mothers.
Decreasing Middle Class. In 2015, the number of middle-class
U.S. adults fell to 50 percent, while the lower and upper classes
expanded. The income gap between middle- and upper-class
Americans has also widened. In 1970, the wealthiest households
held 29 percent of the U.S. aggregate household income; today,
they hold 49 percent.
Boomerang Generation. 29 percent of young adults have moved
back in with their parents.7 This delays young adults' need to
purchase their own homes, contributing to U.S. homeownership
rates in 2016 being at an all-time low.8
Figure 5.1 Demographic Trends Important to Customer
Behavior
Cultural Trends
The cultural values underlying a market vary according to the
unique history of a geography, which can be a region, country,
state, or city. As customer behavior arises from this cultural
soup, it is important that a business stays abreast of
foundational and changing cultural trends for the markets it
serves. Consider the cultural values of a country. According to
the Hofstede cultural values measure, there are six dimensions
of culture on which countries differ:
Power Distance: Societal comfort with unequal distribution of
power between members of society.
5. Individualism versus Collectivism: Degree to which people
primarily identify as individuals or as members of groups
Masculinity versus Femininity: Societal preference for
achievement, competition, and toughness versus cooperation,
caring, and quality of life
Uncertainty Avoidance: Level of discomfort with the unknown
and ambiguity
Long-term versus Short-term Orientation: Preference for
maintaining traditions and norms versus comfort with change
Indulgence versus Restraint: Societal acceptance of people's
desire to enjoy life and have fun.
Figure 5.2 shows how the U.S. and BRIC countries compare on
these values. In addition to these foundational cultural values,
cultural values change over time. Consider, for example, the
trends in Figure 5.3.9
Histogram for Comparison on the United States and BRIC
Countries on Hofstede’s Cultural Values.
Figure 5.2 A Comparison on the United States and BRIC
Countries on Hofstede's Cultural Values
Me Nation. Consumers see themselves as the center of attention
and crave self-expression and individuality. Those who
previously admired celebrities, for example, now desire to
become them, leading to a rise in the number of YouTube stars,
reality shows, and talent competitions. Responsive firms offer
products that can be hyper-personalized, as customer demands
are satisfied through this type of engagement with brands.
Power Play. Customers want to introduce fun, spontaneous
aspects into their routine. Retailers are applying game
mechanics, such as challenges, achievements, and rewards in
order to engage customers. Responsive firms reward customers
who frequently purchase with free products or encourage
customers to visit their social media platforms to receive
discounts.
Visualization. Customers demand immersive experiences
6. through interactive visual content. Examples of this include the
Facebook Live feature, Google Hangouts, viral sharing of
photo-shopped images with Tumblr, and Pinterest's online
pinboard. Taste for aesthetically pleasing designs is critical in
many categories where customers seek a beautiful look to go
with strong functionality.
Transparency. Customers desire transparent and genuine
experiences and want to have control over their lives. They are
increasingly choosing to purchase products that align with their
values, so firms must communicate details of their production
processes, ethics, sustainability, and product quality in a
manner that is easily accessible. One example of a response to
this trend is TOMS One for One shoe donations.
Simplification. Technology has made customers' lives vastly
simpler. Smartphones allow customers to communicate through
social media, shop online, or use GPS trackers whenever and
wherever they want. Firms must cater to this desire for instant,
easier, and simpler customer experiences. PayPal, for example,
allows customers to execute cashless payments and transactions.
Additionally, with this instant access, customers are
increasingly able to compare brands and prices. Responding
firms are challenged to create more personalized suggestions in
order to decrease the time customers spend making decisions.
Snacking. Through technological advances, customers expect all
aspects of their lives to be immediate, interactive, and intuitive.
Customers now prefer to digest smaller portions of information,
data, or entertainment and they prefer access to be immediate
and free. Examples of this trend include blogs, YouTube videos,
RSS feeds, Tumblr photos, and Tweets.
New Networking. Communities can now be based on shared
interest instead of location. Social media and online
communities are thriving, and customers now digitally connect
with a purpose, such as volunteering for a cause or participating
in Kickstarter campaigns.
Local Celebration. Customers are increasingly opting to
purchase locally produced goods over products sourced from
7. other countries. Customers prefer to support local communities,
traditions, and culture because it gives them a sense of pride,
belonging, and exclusivity. Responding firms offer locally
sourced brands and products.
My Tribe. There is growing affinity toward a social unit that is
centered on an interest or activity and not bound by
conventional social links. Harley-Davidson events, such as the
annual rally in Sturgis, South Dakota, attract hundreds of
thousands of participants. The Apple users group has been a
strong part of Apple's success in a PC world. The Internet has
generated a host of communities and chat groups that play an
influential role through information exchange and social
networking.
Renting Not Owning. There is a growing trend, especially
among young customers, toward valuing access to products
instead of owning them. Rather than seeing renting as a poor
substitute for owning, many customers actually prefer the
flexibility and pricing model of renting. This trend can be seen
in the increasing use of Zipcar and BMW DriveNow that allow
customers to use a car for a few hours, and companies, such as
Spotify, that allow customers to listen to music without
purchasing CDs.
Sustainability
A mega cultural trend worth examining in more depth is the
green movement of the twenty-first century. Customers care a
great deal about sustainability, or the impact of their purchases
on the environment, and there are a variety of different ways
that this concern influences their purchasing behaviors. For
example, many customers have switched from conventional
products, such as incandescent light bulbs, gas-fueled cars, and
conventionally grown foods, to more eco-friendly ones, such as
CFL or LED light bulbs, hybrid cars, and organic produce.
Other customers consider how sustainable a firm's business
practices are when deciding whether or not to make a purchase.
Still other customers are choosing to not purchase new products
altogether, instead repairing old products or borrowing or
8. trading products through organizations such as Freecycle.10
Importantly for firms, increasing numbers of customers—66
percent in 2015, up from 50 percent in 2013—report being
willing to pay more for eco-friendly products.11 Some
customers, most notably Millennials in the United States and a
range of customers in developing countries, do pay more for
eco-friendly products, but other customers' actual willingness to
purchase environmentally friendly products lags behind their
purported support for them. For example, 26 percent of
customers say they want more eco-friendly products on the
market, but only 10 percent have actually bought these new
products when they are made available. Companies seeking to
compete on environmental benefits should carefully determine
whether their target market's interest equals their willingness to
pay.
Business and Technology Trends
Business and technology trends represent opportunities to those
firms in a position to capitalize and threats to firms which are
not.
Big Data
The ability to capture and store data became possible in the
1950s and 1960s with large mainframe computers. Since then,
the advent of the personal computer in the 1980s, the rise of the
Internet in the 1990s, and expanded bandwidth into the 2000s
have set up the ability to collect, store, and manipulate large
data sets often referred to as big data. Supported by the “cloud”
where data are now stored and accessed by customers and
companies, big data is one of the megatrends of our era.
Firms in general and marketing teams in particular are swamped
by data and are struggling to turn that data into insights, more
valuable products and services, and better decisions. It is truly
an avalanche that has many sources, some new and some
ongoing. One distinguishing feature of these data is that they
are at the individual customer level, which means that the
9. company has a much richer understanding of customer behavior
and the ability to act on it. For example, a bank achieved more
than 600 percent ROI (return on investment) by using predictive
analytics to more intelligently target customer offers. Among
the sources of these data are Internet search and shopping
records, social media activity, blogging participation, mobile
phone usage behavior including opt-in records of GPS (Global
Positioning System) locations, digital picture and videos,
purchasing data, and much more.
A second distinguishing feature of big data is that it is often
real time in nature, which means that companies are able to
learn quickly if there are problems and work to resolve them.
For example, social media activities help alert the firms to
problems with their products and services, and credit card
companies are able to alert their customers to the possibility of
fraud by documenting purchases in real time and comparing to
the customers' purchase history patterns.
Firms trying to use “big data” to get an edge or just to keep up
with competitors require a set of competencies. First, it is
critical to be able to ask the right questions, both strategic and
tactical, because with big data, questions are not obvious and
the nature of the insights is often hidden. Finding the right
questions requires a deep connection to customers achieved
through interviews or visits where customers purchase and use
products. Second, firms need to be competent in designing and
interpreting an ongoing flow of experiments. The ability to
learn in real time sets up an opportunity for companies to run
small and numerous experiments to tune their strategies. Third,
big data often presents big integration challenges because
companies have social media data in one repository and
purchase data in another. To get the 360-degree view of
customers in communication, purchasing, and social activities,
systems should be set up to capture and integrate customer data.
Finally, companies need to be good at data storage, data
10. handling, analytics, and the development of problem-driven
statistical models. Without such capabilities, they can't play the
big data game.
Innovations
Trends, both market and environmental, can stimulate
innovation. It is useful to distinguish between incremental,
substantial, and transformational innovation. They differ in
terms of how new they are and how much wealth they represent
for the business. An incremental innovation makes the offering
more attractive or profitable, but does not fundamentally change
customer behavior, the value proposition, or the go-to-market
strategy. In general, substantial innovations have ten times the
impact of incremental innovations; the impact of
transformational innovations is ten times greater again.
Substantial and transformational innovations need to be
detected and tracked by companies.
A transformational innovation often provides a fundamental
change in the business model, likely involving a new value
proposition and a new way to manufacture, distribute, and/or
market the offering. It is likely to make the assets and
competencies of established firms irrelevant. The advent of
steam power, which ultimately spelled the end of sail-powered
transport, was a transformational innovation. The automobile,
Southwest Airlines, the business model of Dell Computers,
smartphones, Amazon.com, Uber, and Cirque du Soleil
represent innovations that have transformed markets.
Transformational innovations often attract customers who had
been the sidelines because the prior offering was too expensive
or lacked some critical element.
Substantial innovations are in between in newness and impact.
They often represent a new generation of products, such as the
Boeing 747 or the iPad, that make existing products obsolete for
many customers. Cisco introduced a videoconference
11. technology called telepresence that uses massive amounts of
bandwidth to provide a high-fidelity experience and should
expand the use of videoconferencing. In these cases, the basic
value proposition and business model were enhanced but not
changed. Substantial innovations are much more common than
transformational innovations, but can still create major changes
in the competitive landscape.
Innovations that are transformational or even substantial are
often championed by new entrants into the industry, so it is
important to monitor new, even small, firms and not let the
large, established firms dominate the environmental analysis.12
Incumbent firms—especially successful ones—have incentives
to protect and improve their profitable niches in the market by
extending current offerings with incremental innovations. Their
people, culture, and mix of assets and competencies are unlikely
to support a transformational innovation. As a result, when
transformational innovations appear, the first reaction of
incumbent firms is denial followed by discounting the new
entrant's ability to reach and convert the market. This
skepticism is why horse-drawn buggy manufacturers never
became automobile firms, telegraph companies missed out on
the telephone, and 3M and others felt that the early and
primitive Xerox copy technology would never replace heat-
sensitive copier paper. Chapter 13 will discuss how the
substantial and transformational innovation can define new
subcategories and lead to enduring success.
Workplace
Online communication platforms have increased employees'
ability to work remotely.13 Thirty-seven percent of U.S.
workers reported having used a computer to work from home.
Office workers are especially likely to be able to telecommute
with 44 percent of white collar professionals reporting working
remotely at least occasionally. Remote work can be a boon for
employees when it increases their flexibility, but employees'
ability to work remotely also means that they are increasingly
12. expected to be “on call” for work outside of traditional business
hours.
This blurring of the lines between work and leisure time is
further augmented by the trend for companies to offer lifestyle
“perks” to their employees. These perks range from onsite
health care (Facebook), nap pods, and an errand running service
(Google) to three catered meals a day and meditation classes
(Twitter).14 These more extreme examples still are limited
primarily to technology companies, but firms in a wider range
of industries are adopting employee perks, which, they hope,
can increase both employee satisfaction and productivity.
New technologies, such as Slack, an instant messaging system
designed for internal team collaboration, are now widely used
by employees for all types of instant messaging inside
companies. Launched in August 2013, Slack grew to 4 million
daily users by October of 2016. Slack also appears to be
crossing over from business use to personal use as a social
media platform.15
Another important trend, which has been facilitated by
improved technology, is the growth of the “sharing” or
collaborative economy. This term refers to a business model in
which online technologies enable people to get what they need
from each other rather than from centralized institutions.
Sharing economy companies such as Uber, Airbnb, and
TaskRabbit provide a platform, such as an app, that enables
people who are looking for a service to connect with another
person who is willing to provide it. Originally the domain of
small start-ups, established companies have seen the potential in
this economic model and are beginning to add sharing style
services to their core offerings.16
Sustainable Businesses
The sustainability trend described earlier applies to business as
13. well. In one study by MIT and Boston Consulting Group in
which nearly 3,000 executives from 113 countries were
interviewed, two thirds of the firms said that sustainability was
critically important to being competitive.17 There are several
drivers of “green.” One driver is concerns about global warming
and resource depletion. Many firms feel a responsibility to be
part of the solution, including Unilever and Walmart. Unilever's
CEO Paul Polman observed that climate change cost Unilever
well over 200 million Euros in just one year and that is enough
motivation to do something about the problem.18 In response,
Unilever has set a goal to cut their environmental impact in half
by 2030.19
A second driver is the ability of green programs to provide
functional benefits to firms in the form of cost savings from
reduced energy consumption. Firms are often surprised at the
extent to which green programs pay off. Walmart, whose green
story is told in the insert, discovered, to its surprise, that an
ambitious environmental program was associated with
meaningful, tangible cost savings plus a positive sales response
to green products. A third driver is a desire to be respected by
customers and employees, both of which value a relationship
with a firm that they admire.
WALMART TURNS GREEN
In 2005 Walmart began to develop green programs, an amazing
turnaround for a company that had prided itself on low costs
and prices first and foremost.20 Through its partnership with
the Environmental Defense fund and its own initiatives,
Walmart has set and met numerous environmental goals over the
past ten years.21 The firm has set the goal to create zero waste
across its global operations. It is working to achieve this goal
through projects such as reducing in-store plastic bag usage,
and as of 2016, 81 percent of the materials from operations in
the United States were diverted from landfills. However,
Walmart's most significant area of environmental impact is in
14. how it can influence the thousands of suppliers that produce and
transport its products. Walmart both rewards suppliers who are
already producing products in an environmentally friendly way
by putting a Sustainability Leader badge on approved products
and helps suppliers to shrink their environmental footprint.
These assistance initiatives are wide ranging, from working
with corn farmers to optimize their fertilizer use, to
encouraging suppliers to use sustainably harvested palm oil to
reduce deforestation, to improving energy efficiency in Chinese
manufacturing facilities. Given Walmart's footprint and
influence around the world, these programs are likely to make a
difference.22
Also in 2005, a brand repositioning initiative was launched that
resulted in a new brand position in 2008. Research found that
customers wanted value more than just low prices, value in the
form of cleaner stores, better customer service, more high-
quality products, and the lifestyle benefits of saving money. The
result came together under a new slogan “Save money. Live
better.” It helped provide an umbrella theme for the new
Walmart and its sustainability program as well as organic foods,
higher quality products, and improved store look and feel.
There are still hardcore Walmart critics, but it is clear that their
intensity and breadth are visibly lessened. Articles “Green
Project Making It Harder to Hate Walmart” and “Walmart's
Environmental Game Changer” show evidence of this change.
By 2016, Walmart was in the top 7 percent of all brands in
Y&R's Brand Asset Valuator.23
Why did Walmart suddenly make such a U-turn? Three reasons.
First, the CEO decided it was the right thing to do, based, in
part, on the influence of an environmental professional who had
vacationed with members of the outdoor-oriented Walton
family. Second, a single-minded focus on costs and the resulting
policies regarding employees, communities, and suppliers had
15. generated extremely negative press attention that affected the
company's ability to grow and succeed. More communities were
turning down Walmart stores, and 8 percent of Americans were
committed to shopping elsewhere. Walmart executives knew
they needed to take actions to improve the company image.
Finally, to the surprise of the executives, many of the green
programs were helping the bottom line.
Government/Policy Trends
The addition or removal of legislative or regulatory constraints
can pose major strategic threats and opportunities for
companies. For example, the ban of some ingredients in food
products or cosmetics has dramatically affected the strategies of
numerous firms. The impact of governmental efforts to reduce
piracy in industries such as software (more than one-fourth of
all software used is copied), CDs, DVDs, and movie videos is of
crucial importance to those affected. Deregulation in banking,
energy, and other industries can affect the nature and intensity
of competition as firms enter and exit to take advantage of the
change. The automobile industry is affected by fuel-economy
standards, the luxury tax on automobiles, and incentives for
electronic car purchases. Companies such as Amazon are
dramatically affected by regulations requiring collection sales
tax on products shipped.
Companies should track all legislative and regulatory activities
that have positive and negative implications for their business,
including local, state, national, and international developments.
For example, Brexit will have significant implications for firms
operating in the United Kingdom and the European Union and
beyond. The influx of refugees from the Middle East and North
Africa into Europe, the 2016 coup in Turkey, Russia's
annexation of Crimea, and increased tensions with Ukraine may
provide both opportunities and constraints for firms operating
or planning to operate in these regions. Tracking allows
companies to engage in legal advocacy activities to influence
the nature of policy decisions. Discussed in more detail in the
16. section Scenario Analysis, like any trend, government actions
are not necessarily bad for business and may even be a source
of competitive advantage for some firms more than others.
Economic Trends
Economic factors play a critical role in the effectiveness of a
firm strategy. A very different strategy is needed when the
economic climate is healthy than when it is under stress.
Further, it is far better and sometimes critical to put strategies
into place …
The client is an 8-year-old African American male, Alert &
oriented X 3, speech clear, coherent, goal directed, spontaneous.
who arrives at the ER with his mother complained of feeling
“sad” He is exhibiting signs of depression. Client complained of
feeling “sad” Self-reported mood is “sad”. Mother reports that
teacher said child is withdrawn from peers in class, Mother
notes decreased appetite and occasional periods of irritation.
Client reached all developmental landmarks at appropriate ages.
Physical exam unremarkable. Affect somewhat blunted, but
child smiled appropriately at various points throughout the
clinical interview. He denies visual or auditory hallucinations.
No delusional or paranoid thought processes noted. Judgment
and insight appear to be age appropriate. He is not endorsing
active suicidal ideation but does admit that he often thinks
about himself being dead and what it would be like to be dead.
the Children's Depression Rating Scale was done, obtaining a
score of 30 (indicating significant depression). Child was
referred and seen by a psychiatry for evaluation.
· make three decisions concerning the medication to prescribe to
this client. Be sure to consider factors that might impact the
client’s pharmacokinetic and pharmacodynamic processes. Also
include how ethical considerations might impact the treatment
plan and communication with clients.
Decision #1(Begin Zoloft 25 mg orally daily, Client returns to
clinic in four weeks, No change in depressive symptoms at all)
17. · Which decision did you select? (Begin Zoloft 25 mg orally
daily, Client returns to clinic in four weeks, No change in
depressive symptoms at all)
· Why did you select this decision? Support your response with
evidence and references to the Learning Resources.
· What were you hoping to achieve by making this decision?
Support your response with evidence and references to the
Learning Resources.
· Explain any difference between what you expected to achieve
with Decision #1 and the results of the decision. Why were they
different?
· Decision #2 ( increase the dose of Zoloft to 50mg po daily)
Client returns to clinic in four weeks, Depressive symptoms
decrease by 50%. Client tolerating well.
· Why did you select this decision? Support your response with
evidence and references to the Learning Resources.
· What were you hoping to achieve by making this decision?
Support your response with evidence and references to the
Learning Resources.
· Explain any difference between what you expected to achieve
with Decision #2 and the results of the decision. Why were they
different?
· Decision #3 (maintain current dose of medication)
· Why did you select this decision? Support your response with
evidence and references to the Learning Resources.
· What were you hoping to achieve by making this decision?
Support your response with evidence and references to the
Learning Resources.
· Explain any difference between what you expected to achieve
with Decision #3 and the results of the decision. Why were they
different?
Level 1 heading with concluding paragraph, correct APA format
with no errors. 2 or more credible outside sources.
References
Stahl, S. M. (2013). Stahl’s essential psychopharmacology:
18. Neuroscientific basis and practical applications (4th ed.). New
York, NY: Cambridge University Press.
https://iacapap.org/content/uploads/A.7-Psychopharmacology-
2019.1.pdf
https://www.magellanhealth.com/media/445492/magellan-
psychotropicdrugs-0203141.pdf
Rao, U. (2013). Biomarkers in pediatric depression. Depression
and Anxiety, 30(9), 787–791
doi: 10.1002/da.22171