STEEPLE Analysis

Background

STEEPLE analysis. The model was originally invented by professor Francis J. Aguilar  at Harvard Business School.

The STEEPLE analysis is an environmental framework where you measure external factors of the business environment that surrounds your company or organization. It is available in several variants, including PEST and Pestel. The difference is how many factors are included. 

About the model

STEEPLE is an abbreviation for a number of acronyms in the analysis of the environment.

The acronyms stand for:

S – Social/demographic

T – Technological

E – Economic

E – Environmental

P – Political

L – Legal

E – Ethical

Each acronym stands for a group of factors.

The STEEPLE analysis focuses on the overall strategy and is an important tool for the company's strategic planning. The analysis focuses on the external conditions which can affect the company and which the company thus has no control over. The model is simple to use.

The 7 factors in the STEEPLE analysis

Social/demographic

Refers to the socio-cultural and demographic conditions in the country where the company is located.

The socio-demographic area is about culture, including values, attitudes and norms in a country's population.

When dealing with other countries, it is important to understand their culture, so that you can act and understand their behavior patterns. In working with culture, we have different theories we can use for instance Edgar Schein's cultural analysis and Geert Hofstede's cultural dimensions.

Technological

Refers to various forms of technological development, which may help to optimize some companies, but for others it may threaten their existence.

Technological development is moving fast, which means new methods of producing goods and services, new ways of distribution, and new ways of communicating with customers and customer opportunities. 

Economic

Refers to the socio-economic situation in the country.

The financial field influences how business is done and the opportunities for profit. It concerns factors such as the economic growth rate, exchange rates, interest rate, inflation rate, as well as the purchasing power of companies and individuals – what we also call disposable income.

Environmental

All companies affect their surroundings in one way or another – and are themselves affected by the world around them.

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.

Political

Refers to political decisions that can affect the company in either a positive or negative direction. Political factors can also refer to political stability in the country, labor market legislation, taxes and levies. The analysis of the political area focuses on the extent to which a Danish or foreign government or international organizations intervene in a country's economy.

Legal

Refers to the laws, regulations and taxes that may affect the company. Legal stands for legislation and this area deals with matters such as equality, working environment and safety, legislation on labeling of products, requirements for product safety and consumer rights.

The complexity in these areas can be high when a company trades internationally, as there can be large differences from country to country. For example, there are different regulations for Novo Nordisk to get approval for a new drug in Denmark and in the United States.

Ethical

Refers to ethical norms and values in the country which may influence the company's behaviour. Ethical behavior is linked to the company's CSR strategy. Ethics is also about the marketing methods a company uses. If methods are used that are not properly the company may be suspended, or it may result in new legislation.

The way a company or organization recruits and hires can also be problematic – it can be about equality and salary.

Criticism of the model

The model is simple and easy to use. On the other hand, there is no guidance on which areas are important to include – it is a personal assessment.