STEEPLE analysis is a planning tool for marketing strategies. STEEPLE is an advanced analysis as it measures the macro-environmental external factors. It offers a detailed overview of different external fields. The acronym for STEEPLE analysis stands for Social, Technological, Economic, Environmental, Political, Legal and Ethical. This analysis gives practical insight into each of the above factors that can affect a business. STEEPLE analysis is an extension of the PEST analysis with an additional Ethical, environmental and legal elements.
STEEPLE analysis is used to check the validity and reasonableness of the overriding of business targets and strategies. Any positive factor should be converted into an action plan that will describe how to lessen the anticipated risks. This analysis is very effective and should be applied while monitoring, compiling and reporting the financial plan of an organization.
Factors of the STEEPLE analysis
The seven factors of the STEEPLE analysis that are considered during the conduct of this research are as follows. They are:
In the social segment, the cultural changes and market research are taken into consideration. The social aspect is vital to judging the patterns and trends for a particular country. The STEEPLE analysis points out the fault in the marketing strategy and offers new ideas. The social factors involve the demographic and cultural attributes of the macro environment.
The social factors of the STEEPLE analysis consider the growth of the population, the attitude of the consumer, age structure, lifestyle changes, falling rates, competition, traditions, education level, cultural standards and diversity, health consciousness, and safety emphasis.
The technology of the business world is now completely different from what it was in the past. Technology has advanced all across the globe. Changes in the production methods can offer new opportunities, improve the profit margin of an enterprise and thus enhance the overall revenue. This factor eliminates or lowers the risks to entry in a new industry, enhances the efficiency of the production levels and outsourcing decisions.
The technological elements that are involved in the STEEPLE analysis are the advancement and trends of the technologies, activities for research and development, automation, technological incentives, and the rate of change in the latest technologies.
The economic situation of a country can be understood by weighing the present inflation level, unemployment, international trade and rate of growth. For instance, if a business is settled in a country that might be a sufferer of recession, then small changes should be made in the plan of the capital investment. This factor also has an impact on the purchasing power of the potential customer and capital cost of the company.
The Economic factors included in the STEEPLE analysis are interest and exchange rate, inflation rate, the growth rate of the GDP, stock quotes, and unemployment level.
The environmental aspects assess the positive and negative impact the company is having on the environment. Usually, environmental factors affect the firm related to the agricultural sector. The positive environmental impact is the cleaning and processing of the waste and the negative impact is pollution from the organization.
The environmental factors considered in the STEEPLE analysis are legislation for the environmental protection, management of the wastes and their disposal, water, and air pollution, energy-efficient technologies, and ecology in the society.
Different types of government policies and their changes make up the political factors of the STEEPLE analysis. The changes can be related to social, legal or economic problems. Interventions of the government authorities like change or increase in the interest rate can have a straight impact on the demand patterns of the organization.
The political factors of the STEEPLE analysis that an enterprise should research for are tax policies and the employment laws, regulations on the environment, restrictions on the trade and tariffs, the stability of the ruling party, interference of the state, trade agreements, and clarity of the law.
Legal factors deal with official complications. Thus to avoid any legal problem, it is mandatory to check on the new legal regulations and policies to ensure complete compliance. It also determines how a decision or action of an organization can positively or negatively affect the functioning of that enterprise in a particular country. International organizations should analyze all the legal factors for each of the states they operate.
Examples of legal elements in the STEEPLE analysis are the minority protection act, competition law, legal restraints and regulations, and health and safety policies of the employees.
Social values are an integral part of the ethical aspects of an organization that governs their behavior. Ethical elements determine what is correct and what is not. The common ethical factors for the STEEPLE analysis are the tendency of the people, the value of the culture of the people, morality, integrity, duties, and behavior of the employees towards the society.
Ways to Implement a STEEPLE analysis
STEEPLE analysis can be employed in the following steps. They are as follows:
- A team of strategist analysts led by the departmental heads, stakeholders and process holders should gather as much information as possible.
- Data have to be collected on each aspect of the STEEPLE analysis by using a template to organize the data.
- Once all the data on the factors are collected, each of them has to be evaluated minutely to analyze the threats and opportunities they may incur in the organization.
- An action plan needs to be created to make use of the recognized opportunities. Necessary precautions should also be enforced to decrease the level of risks.
- Once the analysis is completed, the action plans can be shared with the board of directors of the company.
STEEPLE analysis is a very helpful tool to prompt helpful decisions in favor of an organization by analyzing the internal factors of the company and external elements. It helps to find out the position of a business in the external environment.