What is Steeple Analysis, and how can it be used?
A STEEPLE is a Business Management planning tool used to examine factors in the external business environment that affect its operations. STEEPLE includes seven categories of factors that impact business operations and decision-making.
STEEPLE stands for:
- **S**ocial
- **T**echnological
- **E**nvironmental
- **E**thical
- **P**olitical
- **L**egal
- **E**conomic
Managers use this tool to examine the external environment and its impacts on the business. The external environment can create opportunities or threats, and it is, therefore, important for managers to understand changes in the external environment to determine how they can be used to a business's advantage or how to minimise threats.
Businesses cannot control changes in the external environment, but managers must monitor them to create strategies and plan ahead so they can react appropriately.
Social factors in a STEEPLE analysis relate to people, their values, lifestyles, and how these influence economic activity. They include demographics, cultural norms, religious beliefs, and attitudes towards ethics and discrimination. Examples include delayed parenthood, an ageing population, migration trends, and rising retirement ages, which affect workforce availability, recruitment, spending patterns, and consumer behaviour.
Technological factors in a STEEPLE relate to the impact of innovation, automation and technological advancement on the business environment. The technological environment in business refers to the constant changes in machinery, equipment, and digital tools that influence operations, efficiency, and growth. Advances such as personal computers, smartphones, automation, 3D printing, and social media have created opportunities (e-commerce, digital marketing, new jobs like app developers) and challenges (job losses, barriers to entry, and risks like hacking or system failures). Technology shapes competitiveness by driving innovation and introducing potential risks and disruptions.
Environmental factors in a STEEPLE analysis focus on the ecological impact of business activity and the growing demand for sustainable practices. Businesses face pressure from stakeholders to adopt green technologies, renewable energy, and eco-friendly designs as concerns about resource depletion and climate change rise. These factors directly affect operations, with stricter government policies and adverse weather events (such as floods, droughts, or storms) creating organisational risks and opportunities.
In a STEEPLE analysis, Ethical factors focus on the moral principles and values that guide business behaviour. They go beyond just following laws and look at whether a company is acting in a way that is fair, responsible, and socially acceptable in the eyes of stakeholders. Business ethics is about doing what is proper and accountable as part of corporate social responsibility (CSR). Examples include engaging in fair trade with suppliers, treating employees fairly, using honest marketing practices, respecting intellectual property rights, maintaining transparent accounting procedures, and adopting sustainable operations that protect the environment.
In a STEEPLE analysis, Political factors refer to how government actions, policies, and political stability affect businesses and their decision-making. These factors shape the overall business environment, creating both opportunities and challenges. Political decisions shape confidence, competitiveness, and market conditions in various ways. For instance, the level of political stability in a country strongly affects both business and consumer confidenceâprolonged instability or conflict can deter foreign direct investment.
Legal factors in a STEEPLE analysis refer to the laws and regulations influencing how businesses operate and consumers behave. Legislation can affect business formation, quality standards, consumer protection, employment rights, intellectual property, environmental compliance, and restrictions on harmful products like alcohol and tobacco. For example, lawsuits against fast-food companies over misleading nutrition information show how legal standards can directly affect corporate practices, reputation, and profitability.
Economic factors in a STEEPLE analysis relate to the conditions determining an economy's overall performance, often measured by GDP and explained through the business cycle. The cycle includes phases of boom (rising activity, jobs, and prices), peak (unsustainable highs), recession (decline in output and confidence), slump or trough (lowest point with high unemployment), and recovery (renewed growth and employment). Consumer and business confidence, production costs, exchange rates, interest rates, and inflation influence fluctuations in activity. These factors affect competitiveness, spending, and investment, shaping the external environment businesses operate in.
By systematically analysing these seven factors, managers can better anticipate changes, adapt strategies, and position their business to maximise opportunities while minimising potential risks in an ever-changing external environment.