In part 5 of this business mastery series for entrepreneurs, I described the benefits of a SWOT analysis.
In today´s blog post I will share the five steps of conducting a STEEPLE analysis.
I will also explain when you should use this tool, how it relates to other tools and what kind of questions you should ask while performing the analysis.
This tool and all the previous tools I shared will help you to make better and informed decision on how to create greater success in your business.
- ⇒ What does the acronym STEEPLE stand for?
- ⇒ What is a STEEPLE analysis used for?
- ⇒ How does a STEEPLE analysis relates to STEEP, STEEPLED, PESTLE and SWOT?
- ⇒ What are the five steps you need to consider for each factor?
- ⇒ How to conduct a STEEPLE analysis
- ⇒ What questions should you answer in your analysis?
- ⇒ Summary
What does the acronym STEEPLE stand for?
The S stands for social, the T stands for technological, the E stand for economic, the E stands for environmental, the P stands for political, the L stands for legal, and the E stands for ethical.
What is a STEEPLE analysis used for?
⇒ STEEPLE is a strategic planning tool and helps to plan the strategic positioning of your company.
⇒ STEEPLE offers an overview of various external factors. It helps to get practical insights into past, current and future of external environment developments during times of uncertainty.
⇒ STEEPLE helps to determine where your company stands within its external environment.
⇒ STEEPLE initiate the discussion within your company how to adapt to its changing environment.
⇒ STEEPLE is conducted when there is uncertainty about how the market will react to changes in a particular factor or when the company is confused about the external environment.
⇒ The goal is to define strategies for the future or to understand the market.
What is the difference between a STEEPLE analysis and a STEEP, STEEPLED, PESTLE and SWOT analysis?
- STEEPLE and STEEPLED are just a modified version of STEEP. In addition, STEEPLED includes the legal, ethical and demographic factors.
- Compared to a SWOT analysis, STEEPLE is a more advanced tool and helps to assess several external macro-environmental factors. It can be used as an alternative to SWOT.
- The aim of SWOT is to identify the favorable and unfavorable internal and external factors to reach the goal.
- The STEEPLED analysis comprises the same macro-environmental factors as in a PESTLE analysis, except the ethical and demographic factors.
- The STEEPLE analysis will be the best choice for you if the legal and ethical aspects are important for your strategic decision.
- If these two aspects are of less interest to your company than conducting a STEEP analysis might be a better choice for you.
What are the five steps you need consider for each factor?
It is important to follow some steps to get the best results in executing the STEEPLE analysis:
- ⇒ Step 1: Understand the different factors and trends
- ⇒ Step 2: Analyze the different trends
- ⇒ Step 3: Relate the trends to specific challenges
- ⇒ Step 4: Identify the driving forces
- ⇒ Step 5: Make conclusion
Step 1: Understand the different factors and trends
In this step you will need to assess the different factors of the environment. You should try to answer the following questions:
- What are the key trends?
- What evidence support these trends?
- How have these trends evolved historically?
- What is the nature of change in the trends you noticed?
- What kind of effects do the trends have on your company?
Step 2: Analyze the different trends
- What is the interrelationship between these trends?
- Find out the conflicts between these trends.
Step 3: Relate the trends to specific challenges
- In this step you need to identify the trends which play a significant role in supporting or hindering the company’s goal achievement.
- Create a list of possible trends and then determine what the main issues are.
Step 4: Identify the driving forces
- You need to determine what the driving forces behind the issues are.
- Try to identify the causes and symptoms of the trends to find the driving forces.
- When the step is completed it can offer a wealth of insights which will guide the company’s decision-making process.
Step 5: Make conclusions
- This is a crucial step. It will provide a unique opportunity to make conclusions about the external environment.
- It can help how the factor can affect any present and future strategic decision.
How to conduct a STEEPLE analysis
Let´s look at each of the seven factors, you´ll need to judge:
S stands for Social
- In this step look carefully at the social aspects.
- You will have to judge the cultural changes which take place in the business environment.
- Consider to conduct a market research to see trends and patterns.
- You might need to study population growth, consumer attitudes, values, religion, age structure, or lifestyle changes.
- This analysis might point out any faults in your strategy. It can also provide new ideas.
T stands for Technological
- The business world has changed very fast through technological advancements.
- It includes factors like innovation, communication, energy, and transport, etc.
- Changes in the method of production can pose new opportunities and profit for your company.
- By monitoring the technology industry you can capitalize more on changes.
E stands for Economic
- The economic situation will change and you have to weigh the present levels of inflation, economic growth, and unemployment, interest rates, subsidies, and availability of jobs, etc.
- By doing so, you can implement your strategic plan better.
E stands for Environmental
- It involve ecosystem factors such as water, wind, food, soil, energy, pollution and environmental regulations.
- All businesses impact their environment but the impacts vary from business to business. This impact can either be negative or positive.
- It is negative if it produces pollution or a lot of waste.
- It can be positive when the environment benefits, e.g. by cleaning waste.
P stands for Political
- Changes in government policy make up political factors.
- The changes can be economic, social, or legal.
- Factors to be considered include political stability, regulation of monopolies, tax policies, price regulations, consumer protection, jurisdiction and trade unions.
- Changes like these will have a direct impact on your business.
L stands for Legal
- The legal limits and regulations prevent negative behaviors.
- To operate legally in the environment, it must follow the laws.
- Any business should focus on at least on health, safety, employment, competition laws.
- To ensure compliance, you need to check on new legal requirements on a regular basis.
E stands for Ethical
- A range of social values 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.
- It is advisable to be social responsible and to take your company to a better ethical standing.
To sum it up, answer 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 wider economic factors?
- What are the industry’s environmental concerns?
- What is the political situation of the country? How can it affect your industry?
- What is the legal framework?
- Is there any legislation that regulates your industry?
- How likely will the law change for your industry?
- What ethical aspect need your company to consider?
- ⇒ Key Point #1: STEEPLE is a strategic planning tool and helps to plan the strategic positioning of your company.
- ⇒ Key Point #2: STEEPLE helps to get practical insights into each of the external factors so you can draw conclusions for your decision-making process.
- ⇒ Key Point #3: STEEPLE helps to define strategies for the future and to understand the market.
I´m available to support you through this difficult time by re-imagine your business. A STEEPLE analysis will help you in your decision-making process and help you adapt your strategy to the variety of external factors.
I will work with you and your leadership team to analyze the company´s seven STEEPLE factors. We will develop a tailored strategy that takes into account these seven factors. If necessary we can add the demographic factor as well (STEEPLED). The goal is to get your business up and running at its peak performance.
Contact me for a complimentary 30-minute strategy session:
Coming up next month…
In my next blog post, I’ll share how to conduct the Porter´s Five Forces.
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