A STEEPLE analysis is a technique used by organizations to understand external factors that can have an impact on business areas. Using this tool can help support your strategy development, evaluate the achievability of your goals, and address current or predicted issues in the operations of your growing business.
Our expert team at Business2Community has put together this comprehensive guide to understanding and applying a STEEPLE analysis to your company. Follow this guide to understand the biggest threats and opportunities your organization is facing both now and in the future.
STEEPLE Analysis – Key Takeaways
- A STEEPLE analysis can help organizations understand trends and external forces that might impact their operations.
- It covers the social, technological, economic, environmental, political, legal, and ethical factors affecting organizations.
- This external analysis technique can help company leaders with more strategic decision-making and improved risk management and mitigation.
What Is a STEEPLE Analysis?
STEEPLE analysis is a tool that can help you strategize, evaluate, and resolve issues in your daily business operations. It can be used to scan the external environment to help businesses understand social trends and other factors. Note that STEEPLE analysis is not the same technique as PESTEL analysis, though there is some overlap.
STEEPLE refers to the social, technological, economic, environmental, political, legal, and ethical factors affecting a business. The technique helps you and your leaders to understand the potential impact of these factors and how best to manage them.
By including this insight in the strategic planning process, businesses can gain a competitive advantage and increase revenue. STEEPLE analysis also supports organizations to stay up to date with the latest trends and improve product and service quality.
STEEPLE analysis can be used to inform:
- Product development, by providing insight into consumer behavior. This can guide decision-making about the development or distribution of a product or service to a particular region.
- Workforce planning, by helping businesses identify emerging changes that may affect the future job market and career attitudes and lead to critical skill gaps.
- Strategic planning, by giving business leaders detailed information about the wider business environment, growth targets, brand positioning, and potential risks.
- Marketing planning, by providing information on a range of external factors and market trends that can support the development of an effective marketing strategy.
STEEPLE Analysis vs. PESTLE Analysis
Another widely used technique for assessing external factors is PESTLE analysis. While both STEEPLE and PESTLE analysis are used to evaluate external influences, they do have some differences.
PESTLE stands for political, economic, social, technological, legal, and environmental factors. It considers a wide range of macro-environmental factors that can affect an organization. Similar to STEEPLE, PESTLE supports the development of business strategies that are in tune with the external environment.
STEEPLE analysis expands on PESTLE analysis by also including ethical and environmental factors. This enables businesses to evaluate other factors such as corporate social responsibility, ethical sourcing, carbon footprint reduction, and sustainability. In this way, STEEPLE provides organizations with a holistic perspective, and a deeper risk assessment, by including factors that are increasingly important in our socially responsible world.
An organization’s choice between the PESTLE and STEEPLE depends on its particular needs and objectives.
How to Perform a STEEPLE Analysis
Follow these four simple steps to conduct your own STEEPLE analysis and support your strategic decision-making:
Step 1: Identify the Factors
Think about which external or internal driving forces to assess. Working through the various factors covered by STEEPLE can help you identify the different internal and external influences affecting your business in its current state.
It’s recommended that you choose the variables most likely to affect your business or sector. For example, a tourism business might rank the strength of the local exchange rates or political stability as their most important factors.
Step 2: Gather the Information
To find information, you can read online or print articles, or listen to news reports or podcasts. It might also help to look at past events and the impact they have had on both your business, if applicable, and similar organizations.
Learning more about your competitors can also highlight whether they present any risk to your business operations. You can do this by visiting their websites, reading press coverage, following their social media accounts, or even attending new product launches or company events.
Make sure to use a range of sources to get a comprehensive and holistic overview of the factors.
Step 3: Determine the Impact
Once you’ve gathered your data, it’s time to work out how the various external and internal factors might affect your business. You can do this by ordering them in relation to the level of risk they present to the business and working out your options to manage the risks. Consider categorizing factors as being low, medium, or high risk or other ways to rank priority,
This exercise can help you to predict potential threats, develop proactive solutions, and identify any opportunities to increase revenue or profits. STEEPLE generally works best when you develop a specific action plan for each identified threat or opportunity.
Step 4: Evaluate Your Strategies
After completing your analysis, you can start to look at any opportunities to adapt or develop your strategy to address the forecasted threats. Depending on your situation, you might need to develop an entirely new strategy. make significant changes to your internal processes, or just make a few tweaks here and there.
Finally, before implementing your new or revised strategy, make sure to look again at how well they set your business up to address any potential threat.
Example of STEEPLE Analysis
Here’s an example of how the STEEPLE technique can be applied.
Opportunities and Threats for an HVAC Company
The first step for this company is to work out which factors and variables might impact the business and gather the information. Let’s work through the seven factors covered in STEEPLE.
- Social factors: Here we need to look at any cultural shifts taking place where the business operates. Important social trends for an air conditioning and heating company might include local population growth rates, age distribution, and shifting consumer behavior to adopting more environmentally friendly options. The analysis could highlight a need to expand or adapt services to make sure the business can capitalize on its changing market.
- Technological factors: Technological advancements can impact demand and create new markets and opportunities. By monitoring technological shifts, we can see when new technologies that might appeal to customers are on the horizon, such as app-controlled units and smart-home connectivity. This will enable the company to stay ahead of the curve and get to grips with new products as they come to market.
- Economic factors: The economic environment, such as inflation, interest rates, economic growth, unemployment, and international trade, can all play a part in consumer spending trends and operating costs. For example, if the analysis suggests that a recession is looming the business’s customers will likely hold back on any non-essential work in their homes. These economic factors can guide any investment and workforce plans.
- Environmental factors: The environmental impact of an organization can vary. An aircon and heating company has a significant opportunity to improve its impact on climate change, through its own actions to reduce operational carbon emissions and through the products it promotes such as heat, sells, and installs for its customers, such as offering heat pumps. Changes to environmental laws need to be monitored, also.
- Political factors: This includes impending changes to government policy (both local and national) such as tax policy, trade restrictions, environmental regulations, and political stability. Political forces like these can directly impact a company’s finances. For example, political factors such as tax breaks or grants for sustainable businesses could be an incentive to accelerate a move to offering more environmentally friendly products.
- Legal factors: Changes to employment laws might hinder the company from taking on new staff or working with freelancers and gig workers, due to the reclassification of 1099 and w-2 employees. Or, there could be an upcoming change to competition law which enables the company to target new areas. All these legal factors and the general legal landscape must be part of the strategic planning process.
- Ethical factors: These are the social values that shape the way an organization behaves. The ethical ideas of a country are unlikely to change overnight, but a news story could suddenly shine a light on certain practices or ideals so it’s still something to bear in mind, such as where or how a product is manufactured that the HVAC company offers.
Now it’s time to determine the impact and evaluate existing strategies. We can do this by ordering the risks and opportunities along with possible solutions as follows:
| Risk Level | Risk | Solution |
| High | Not keeping up to date with technology and losing future business | Complete training on installing latest technology |
| Medium | Not being able to meet rising customer demand | Hire and train additional staff |
| Low | Missing out on government funding for sustainable businesses | Adjust business plans to meet the necessary criteria |
From this, the company can adapt its plans and strategy to take account of these external factors and push for success. They may also want to consider a SWOT analysis which can help with identifying and analyzing internal strengths and weaknesses.
How to Adjust a STEEPLE Analysis
As a business owner, there are several ways you can address the threats and opportunities highlighted by your STEEPLE analysis. While there will be factors outside of your control, such as tax policies, and some that are impossible to predict, acting on what you can control can be a great way to safeguard your revenue and profits.
Here are some of the steps you might consider taking:
- Plan a gradual growth in your workforce to adapt to local population growth forecasts.
- Organize training and development for staff to keep them up to date with the latest technological changes.
- Have plans in place for cost-reduction activities in the event of an economic downturn.
- Budget for a move to a fleet of electric vehicles over a set period of years.
- Keep on top of the political mood, especially around significant milestones such as elections.
- Make sure you have good legal support, if this isn’t your area of expertise, to ensure you don’t fall foul of any legislative changes.
- Implement a solid corporate responsibility policy to keep your organization clear of any scandals.
Limitations of STEEPLE Analysis
While it’s a valuable tool for evaluating the external environment of a business, like any framework, STEEPLE has some limitations. These include:
- Subjectivity: The framework relies on subjective judgments by the people doing the analysis. This of course means the results can be somewhat biased by personal experiences and lead to variations in interpretation.
- Time-consuming: It can be very time-consuming and resource-intensive. Sometimes the process can be hampered by information overload, or insufficient data.
- Limited focus: While STEEPLE considers a wide range of external factors, it’s not realistically possible to cover every factor in deep detail, meaning the analysis could miss some critical aspects.
- Not actionable: The technique identifies opportunities and threats but doesn’t itself provide recommendations on how to address them – businesses often need to employ additional tools and approaches to translate the insights into actionable steps.
While the STEEPLE technique can provide valuable insight, it’s important to recognize these limitations and supplement it with other analytical approaches, such as thematic analysis or multivariate analysis to make well-rounded, informed decisions.
The Value of STEEPLE Analysis
Conducting a STEEPLE analysis can offer several benefits to organizations, helping to guide strategic decision-making and better risk management.
By identifying potential threats and opportunities, your business can make well-informed strategic decisions based on a better understanding of the external factors that could impact your operations.
It can also help your company to keep ahead of industry and consumer trends and any legislative changes. By doing this, your organization can position itself as an industry leader and gain a significant competitive edge.
However, as with all analytical frameworks, STEEPLE has its limitations.
It’s important to recognize these limitations and keep them in mind when planning actions following your analysis. It can also help to conduct other analytical techniques to verify your findings and gain a different perspective.