1.

5 External Environment
STEEPLE Analysis

 A business tool per understanding a business external environment.

 Looks at social, technological, environmental, ethical, political, legal and economic
factors and guides decision making by analysing external opportunities and threats.
 External factors heavily influence the business. So, the STEEPLE analysis is important.
1) Social Factors

 Population demographics can change (more young, more old woman, more skilled men)
 Society’s attitude towards some issues
 Cultural and religious beliefs
2) Technological Factors

 Innovations in technology
 Information technology (social media enhances mouth-to-mouth promotion)
3) Economic Factors

 Stability of economy (rapid inflation in Zimbabwe, rapid economic growth in India)

 Interest & tax rates
 Foreign relations & exchange rates
4) Environmental Factors

 Changes in social attitudes towards environments mean that businesses have to

continuously review their work practices.
 Threats (natural disasters)( Are there frequent earthquakes at this location?)
 Waste disposal and recycling pressure from media & pressure groups.
5) Political Factors

 Laws (minimum wage, business rules) & policies (monetary, fiscal)

 Deflationary or Expansionary policies
 Possible chances and impact of political unnest
 Elections (can be critical)
6) Legal Factors

 Consumers protection legislation – must provide true descriptions of producer.

E.g. Calories and components of food
 Employee protection legislation - l was protecting interests of workers
 Environmental protection legislations
7) Ethical Factors

 Client confidentiality
 Bribery and other illegal transactions (India, Venezuela, Afghanistan is corrupted)
 Treatment of employees
How changes in STEEPLE Factors affect a business’s objective and strategy?

 Changes in social norms, public opinion and ethical views affect company’s products,
activities and marketing strategies.
 Changes in political or legal factors force business to operate according to regulations &
comply with them
 Changes in technological factors results in adaption of newer technology and thus
efficiency increased and EOS may occur.
 Changes in environmental factors force companies to engage in in sustainable
production processes.
 Changes in economic factors affect costs of operations, spending attitudes of customers,
etc