STEEPLE analysis considers various external factors that can influence business performance of a company. This tool is often used to identify those factors that can influence business or organization. There are seven areas that STEEPLE analysis takes into consideration.
Thus, STEEPLE analysis deals with political, economic, social, environmental, legal, ethical and technological factors that have both positive and negative impact on the company or entire industry.
Why is use of STEEPLE analysis recommended for businesses? This is a very good way of analyze and external environment in which the company is operating. Moreover, STEEPLE analysis can also offer suggestions on how to respond to challenges and solve problems, if any.
One of the most common mistakes in use of STEEPLE analysis is separate consideration of various factors. They are all interrelated and thus have to be analyzed in complex. Besides, one should come up with suggestions and answer the question What does it mean for my company? Response and counter actions are required.
Such factors can generally present strengths and weaknesses, threats and opportunities in various external environments every company is bound to operate in. This article will offer a short overview of the seven external factors that can influence business performance as well as focus on pros and cons of STEEPLE analysis.
Social factor often includes demographics, social and labor mobility, changes in lifestyle, balance of work and life, education and fashion, health and welfare, poverty levels, work security and living conditions, as well as income distribution. In other words, this is information related to social trends.
Technological factor studies new developments and discoveries, speed of technology transfer, use of energy, the impact of IT Technologies on business, Internet progress, spread of mobile technologies, average spend on IT etc. Every company should keep up with technological progress.
Economy is all important, especially for companies operating in the international market. This factor studies monetary policy, government spending, taxation issues, inflation, exchange rate, unemployment policy, general economic situation, customer expectations and purchasing power etc.
Environmental issues are very hot these days, as people came to understand they have to take proper care of nature. This factor addresses global warming, carbon emissions, climate change, environmental regulations and legislation, green agenda etc.
Politics is inseparable part of social processes. This factor studies political situation, results of elections and possible consequences for the business, governmental decisions on regulation of business relations etc. Very often political decisions are made to normalize economic situation in the country.
Every company is operating in a certain legislative system, and thus should comply with the applicable laws. Legal departments of companies must pay a special attention to corporate governance, and international trade regulations, legislation on competition and monopoly etc.
Ethical constituent is very important as well. Client confidentiality, business ethics and reputation are very important factors to consider.
Among key advantages of STEEPLE analysis are focus on external factors that influence company performance and ability to respond to certain challenges. Some business analysts claim that STEEPLE analysis only underlines something that is already known, and this viewpoint has also its supporters.