Difference between STEEP and STEEPLE Analysis
STEEPLE analysis is a strategic planning tool. It can be helpful when planning the strategic positioning. SWOT Analysis is a popular alternative. STEEPLE is more advanced as it deals with macro-environmental external factors.
STEEPLE offers an overview of various external fields. It is an acronym for Social, Technological, Economic, Environmental, Political, Legal and Ethical. You can get a practical insight on each of these factors. These elements can affect your business. So, carry out the analysis and take fitting measures.
Each letter in STEEPLE stands for an external factor which you will judge. I have explained what each factor looks into in this article. You will have to study various elements and then make conclusions. Treat 1 letter (factors) as 1 step.
S Stands for Social
In the social step for STEEPLE analysis, you have to look carefully at the social. You will also have to judge the cultural changes which take place in the business environment. This step often includes market research. This is because it is important to see trends and patterns.
You might need to study population growth, consumer attitudes, age structure, or lifestyle changes when analyzing the social environment. The analysis might point out any faults in your strategy. It can also provide new ideas.
T Stands for Technological
The business world has become different from what it was in the past. A lot of these behavioral changes are a result of technological changes. Technology has advanced in all parts of the world. The importance of these changes depends on the business market.
Changes in method of production can pose as new opportunities. These can help to improve your company’s profit margin, but these need huge initial investments.
You should understand that these technological changes can impact demand. Advancement in technology can create new markets and new opportunities. By monitoring the technology industry, you can capitalize more on changes.
E Stands for Economic
The economic situation will change a lot of times throughout the company’s lifetime. You have to weigh the present levels of inflation, economic growth, unemployment and international trade. By doing so, you can carry out your strategic plan better.
For example, if the trends suggest that your country might be a victim of the recession, you should make small changes in the capital investment plan. Changes are also needed in product launch strategies.
E Stands for Environmental
The second E in STEEPLE is for the environment. All businesses impact their environment. The impacts vary from business to business. This impact can either be negative or positive. It is negative in cases of pollution or waste. It can be positive when the environment gets benefits like processing and cleaning waste.
P Stands for Political
Changes in the government policy make up the political factors. The changes can be economic, social or legal. They might even be a combination of these 3. Example of an element would be increase or decrease in tax. Your government might increase taxes for some businesses while it reduces taxes in other areas.
Changes like these will have a direct sway on your businesses. So, try to stay up-to-date with all the political factors. Government interventions, such as changes in interest rate policy, can have an impact on company’s demand patterns.
L stands for Legal
Everyone hopes that their business goes like they wish. It is not that easy to shape a business. The legal limits and regulations avert negative behaviors. These elements also increase the cost in many industries.
To operate legally in the environment, it must follow the laws. The business should focus on health, safety, employment and even competition. There are many other factors which you should watch. To ensure compliance, you need to check on new legal requirements.
E stands for Ethical
This E in STEEPLE refers to the range of social values which shape business behavior. The values provide a basis for what is right and what is not. You must always check the company’s ethical factors. The ethical ideas of a country will not change overnight. But, small changes in morality take place over time
I suggest using the concept of social responsibility to take your company to a better ethical standing.
Business owners spend a lot of time to analyze the internal capabilities of their company. The external factors have equal impact on the success of a firm. STEEPLE analysis is a great way to prompt helpful discussion. It helps to find out where your business stands within its external environment.
STEEP analysis is a similar strategic tool. STEEPLE and STEEP are almost identical versions of each other. Their common goal is to define strategies for the future or to understand the market. The best way to separate STEEPLE from STEEP is to say that it is a modified version.
The framework for STEEP has gone through many alterations. Along the way, Marketing experts have added certain factors to the analysis. They thought STEEP analysis was not enough for some organizations. The experts felt the need of elements like Legal and Ethical.
The legal and Ethical aspect of business is not considered in STEEP. As they prove important for some firms, they perform STEEPLE analysis. Ethics explores demographics in a different way. The added factors help to use the framework better while researching the market.
STEEP analysis deals with the following questions:
- How much importance does culture have in the market? What are its determinants?
- What technological advances are likely to emerge and affect the market?
- What are the widespread economic factors?
- What are the industry’s environmental concerns?
- What is the political situation of the country? How can it affect the industry?
STEEPLE will urge you to ask all the above-mentioned questions. In addition, you will have to find answers to the below questions:
- Is there any legislation which regulates the industry? Can there be any change in the legislations for the industry?
What are the related ethical factors?
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