What is STEEPLE Analysis?
The STEEPLE Analysis is one of many strategies employed by firms to determine where they should be positioned on the market.
Companies implement Steeple analyses in conjunction with SWOT analysis, as well as sometimes instead of SWOT analyses.
Steeple analysis is a technique that is used to investigate external macro-environmental influences. A firm needs to understand external influences to comprehend and enhance its value chain.
The external environment does not immediately impact your business, though it might result in unexpected problems if you ignore it.
The acronym STEEPLE stands for Social, Technological, Environmental, Economic, Legal, Political, and Ethical Analysis.
A similar analysis method, such as STEEPLE, PESTLE, PESTLED, SLEPT, or PEST, is useful to examine external issues that could jeopardize your organization or negatively impact it over the long term.
There should be no ambiguity in how an organization views external and internal variables.
This is why STEEPLE analysis is frequently used in conjunction with SWOT analysis to explore external and internal issues.
This section discusses the external issues Steeple considers and their potential effects on your organization.
STEEPLE analysis is a technique for strategic planning. It can be beneficial when strategizing about strategic posture. A popular method is to do a SWOT analysis.
STEEPLE is more sophisticated since it takes macro-environmental external elements into account.
How To Perform STEEPLE Analysis?
You can gain practical knowledge about Social, Technological, Environmental, Economical, Political, Legal, and Ethical factors. And how these factors can affect your business. Therefore, do an analysis and take appropriate remedies.
Each letter in STEEPLE denotes an external factor upon which you will pass judgment. In this article, I’ve discussed what each factor considers.
You’ll need to examine a variety of factors and then draw conclusions. Consider each letter (factor) as a separate phase.
S In STEEPLE Analysis => Social
The social step of STEEPLE analysis requires a close examination of the social. Additionally, you will need to assess the cultural shifts occurring in the corporate environment.
This step is frequently accompanied by market research. This is because it is critical to recognize patterns and trends.
The social aspect is related to your target audience’s culture, attitude, interests, education level, age group, and belief system. Social considerations influence customers’ purchasing decisions.
When studying the social environment, you may need to consider population growth, customer sentiments, age structure, and lifestyle changes. The examination may reveal flaws in your strategy. Additionally, it can generate new ideas.
Having exact information about the social element is crucial for marketing your product and using that information to determine the product’s price and features. Additionally, social considerations influence marketing and advertising decisions.
For instance, an advertisement will have a greater impact if it is delivered in a language that your target audience understands.
Additionally, the social factor affects various critical aspects of a product, such as its packaging.
T In STEEPLE Analysis => Technological
The business world has evolved from its historical roots. A significant portion of these behavioral shifts is a result of technological advancements.
Technology has advanced globally. A company’s business market determines how significant these adjustments are.
Technology plays a role in business as well. Corporate practices are becoming more effective and efficient with the advent of new technology. The advancements in technology have also led to changes in company operations.
The expectations of your customers are also increasing as technology advances. Your offerings are expected to meet a variety of needs.
Manufacturers might find new opportunities by changing their methods. They can assist in increasing your company’s profit margin but require a significant upfront investment.
Restaurants deliver services differently today than in the past, for example.
People can now have food delivered to their homes by ordering online and providing instructions.
Restaurant operations will change in the future as a result of modern technologies. Technology is a critical role in how a firm operates.
You should be aware that these technological advancements may affect demand. Technological advancements can open up new markets and opportunities.
You can determine how to capitalize on changes in the technology business by keeping an eye on it.
It is crucial, especially in today’s world when technology advances at a breakneck pace, that a company remains competitive.
The emergence of new technologies also entails innovation and a shift in client demand. The products are delivered quickly and efficiently, and the services are delivered quickly.
A rapid exchange of information allows businesses to obtain information quickly and respond to technological advances.
A business that is unwilling or unable to adapt to evolving technologies will soon go out of existence. As a result, the technological aspect is a critical component of the STEEPLE study.
E In STEEPLE Analysis => Economic
The third STEEPLE factor is economic factors. The economy has a significant impact on the business of an organization.
Business leaders will have to adjust to changing economic conditions at various times throughout their existence.
You must consider current inflation, economic growth, unemployment, and international trade levels. This will enable you to execute your strategic plan more effectively.
National interest rates and fiscal policies affect a company’s sales because they affect consumers’ purchasing power.
A strong economy will produce a high average income for its citizens, resulting in additional spending power. Businesses will earn a profit if more customers purchase.
You might need to make minor adjustments to your capital investment strategy if statistics indicate your country could suffer from a recession. A new approach to product launch is also required.
A company’s performance may be affected by variables other than those listed above, such as Gross Domestic Product (GDP), currency rate fluctuations, stock quotes, inflation rate, tax policies, unemployment rate, and substitute markets.
Economic analysis must therefore be conducted before launching a new business venture.
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E In STEEPLE Analysis => Environmental
The second E of STEEPLE is for the environment. Every business affects the environment in some way. Different businesses will experience different effects.
There are both positive and negative effects associated with this. Pollution and waste make it detrimental. The process of processing and cleaning garbage can benefit the environment.
Various factors contribute to the problem, including waste management and disposal, energy-efficient technology, pollution, environmental protection legislation, animal protection legislation, forest and wildlife protection legislation, clean air, climate change, and clean water.
A firm’s operations are affected by all of these factors. Before the deterioration of the environment and increased pollution, there were no regulations requiring waste management and disposal, but today there are strict rules requiring businesses to develop efficient systems.
This makes the environment factor one of the most important components of a STEEPLE analysis that businesses must regularly conduct to avoid environmental violations.
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P In STEEPLE Analysis => Political
A business’s ability to conduct business is dictated by the political environment. Politics affects trade agreements, state interference, tariffs, restrictions, political parties, political legislation, and lobbying.
The changes in government policy determine political factors. Changes in the economic, social, or legal spheres are possible.
Maybe they’re a mash-up of all three. Increases and decreases in taxes are examples of elements. Taxes may be increased on certain enterprises while decreased on others.
A firm’s performance is affected by all of these factors. A business must obtain approval from the state’s legislative authorities to operate successfully.
Your businesses will be directly affected by these types of changes. Hence, you should stay current on all political developments.
Business demand patterns can be affected by government policy changes, such as interest rate changes.
L In STEEPLE Analysis => Legal
The goal of every business is for it to run smoothly. A business cannot be molded easily. A legal constraint or a rule serves to prevent certain behaviors from occurring. These variables also increase the cost of goods across a range of sectors.
The legal aspects of your business include a wide range of variables that influence whether it is legitimate or not, as well as how it operates.
A legal factor can include employment law, consumer law, anti-discrimination laws, labor law, occupational health and safety law, and so on.
Efforts to operate legally in this environment are contingent on adhering to the laws. A business should prioritize employee health and safety, as well as employment and even competitiveness.
There are also other variables to consider. You must monitor newly enacted legislation to ensure compliance.
Business owners need to become familiar with all of the state’s legal requirements to establish their operations.
It is important to understand all the legal requirements and approvals required to conduct business if you enter an international market.
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E In STEEPLE Analysis => Ethical
The E in STEEPLE stands for the assortment of social values that make up business politics. They serve as a guide to determine what is and is not acceptable.
Make sure to stay on top of the company’s ethical standards. The ethical values of a country cannot be changed overnight. Over time, morality changes in modest ways.
Generally, an ethics code pertains to a large set of ethical principles that members of a religion adhere to. An ethical element helps businesses determine which actions constitute good or bad business decisions.
Your business can improve its ethical standing by embracing the concept of social responsibility.
An ethical business has morals, obligations, behavior, and integrity.
Consumers and employees benefit more or less from an organization’s actions based on ethical considerations. Therefore, the ethical dimension is an essential element of STEEPLE analysis.
Political Factors Affecting Business Environment
Why is STEEPLE Analysis Used?
The internal capabilities of an organization are assessed by business leaders frequently.
The success of a firm is influenced equally by external factors.
The STEEPLE analysis is a great way to stimulate a fruitful discussion. You should know how your company fits in with its external environment.
The STEEP analysis is similar to other strategic techniques. STEEPLE and STEEP are nearly identical variants. All have the same aim: to develop a better understanding of the market or to set future strategies.
STEEPLE can easily be distinguished from STEEP by specifying that it is a modified version of STEEP. A STEEPLED analysis is another form.
The structure of STEEP has undergone numerous revisions. Marketers added other variables to the investigation along the way.
The STEEP analysis did not meet the needs of certain organizations. Experts agreed that Legal and Ethical aspects are essential.
STEEP does not mention a business’s legal or ethical obligations. STEEPLE analyses are crucial to some businesses.
A unique approach to demographics is taken by ethics. These additional criteria facilitate the framework’s use in market research.
The STEEP analysis addresses the following issues:
- How significant is the culture in the market? What are the factors that influence it?
- What technical advancements are most likely to occur and have an impact on the market?
- What economic considerations are at play on a broader scale?
- What are the environmental issues of the industry?
- What is the country’s political situation? How might this affect the industry?
STEEPLE analysis will compel you to address all of the preceding questions. Additionally, you will need to answer the following questions:
- Is the industry regulated by any legislation?
- Is it possible for the industry’s legislation to change?
- What are the ethical implications?
Difference between STEEPLE and PEST Analysis
A company uses STEEPLE and PEST techniques to examine external or macro-environmental issues.
STEEPLE attempts to analyze external aspects from a broader perspective than PEST by looking at them socially, technically, environmentally, economically, legally, and ethically.
STEEPLE evaluates all of the criteria considered by the PEST analysis tool and a few additional elements.