The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors Legal and Ethical.
Understanding the STEEPLE analysis
The STEEPLE analysis is a tool that helps an organization evaluate its external environment with respect to eight key factors.
The STEEPLE analysis is one of several variants of the PEST analysis, a popular strategic management tool developed in the 1960s by American scholar Francis Aguilar.
Similar to unrelated frameworks such as the SWOT analysis, the STEEPLE analysis evaluates the various factors that have the potential to impact business decisions.
Unlike the SWOT analysis, however, there is scope in the STEEPLE approach to examine the various relationships between each of the factors.
The STEEPLE analysis is also more comprehensive than its counterparts, assessing seven factors that give the analysis its name: socio-cultural, technological, economic, environmental, political, legal, and ethical.
In the next section, we’ll discuss these in more detail by way of an example.
STEEPLE analysis case study – Walmart
Below is a look at a sample STEEPLE analysis for Walmart, one of the world’s largest retailers.
With over $555 billion in net sales in 2021 the company operates a differentiated Omni business model with three primary units comprising Walmart U.S, Walmart International, and Sam’s Club (approximately 12% of its net sales) a membership-only warehouse clubs. Together with Walmart+, a subscription service including unlimited free shipping, unlimited delivery from its stores, and discounts launched in 2021.
Social
Social factors encompass those related to consumer culture, lifestyle, and behavior, to name a few drivers.
When Walmart expanded into Germany and spent over €2 billion in the process, the company failed because it did not understand the German culture.
It trained its store employees to smile and be conversive with customers, which is not a common practice in the country.
Fortunately, Walmart has been more successful in capitalizing on other social factors such as urban migration and a preference for healthier food items.
Technological
Walmart is not immune to the various technical factors that impact small and large organizations alike.
For a company of Walmart’s size and reach, automation via technology is supremely important.
The company has leveraged machine learning and cloud-powered checkout and pickup technology to offer a more seamless experience to customers.
Walmart has also partnered with Adobe to develop an eCommerce platform where third-party merchants can sell their goods and utilize the company’s fulfillment network.
Walmart has to contend with various economic factors such as unemployment, international trade sanctions, inflation, and recession.
However, it is perhaps more shielded from negative economic events because of its size, industry, and ability to sell products and services at a lower price than its competitors.
Nevertheless, Walmart has been forced to increase its minimum wage in the United States amidst pressure from competitors, the government, and a challenging labor environment.
Walmart has had a somewhat chequered history in terms of environmental factors.
It has been accused of illegally dumping hazardous materials such as batteries and aerosol cans into California landfill facilities.
The company was also forced to pay an $82 million fine in 2013 for disposing of bleach and fertilizer into a local sewer system.
Despite these problems, Walmart created the Project Gigaton project in 2017 to engage in climate action with suppliers, NGOs, and other key stakeholders.
Political
Walmart benefits from the relative political stability of its biggest markets in the United States and Canada, but as we learned earlier, the former is also subject to government-mandated increases to the minimum wage.
The company’s foray into the Chinese market has also seen it encounter various political stressors.
The Chinese government has attacked Walmart stores on several fronts in response to its decision not to sell in the politically sensitive Xinjian region.
In retaliation, several Walmart stores have been cited for a range of issues including a lack of food safety.
Legal
In addition to the legal ramifications of illegal dumping and a rising minimum wage, Walmart also has to deal with tax law reform, equal opportunity legislation, and the anti-competitive consumer watchdog.
Walmart has been sued in the past for employment discrimination on more than one occasion.
One case involved an employee who was fired with Down syndrome, while other more recent cases have been based on racial discrimination.
Ethical
The ethics and compliance section on Walmart’s website paints a clear picture of where the company stands on ethical factors.
Its ethics policy, which is based on trust and integrity, relies on proper ethics response training for employees and zero tolerance toward harassment and discrimination.
Among other initiatives, Walmart also hopes to promote health and safety, compete in the marketplace fairly, combat bribery and corruption, and use data and technology sensitively.
STEEPLE analysis case study – Costco
In this STEEPLE analysis case study, let’s analyze the discount retail chain Costco.
Social
The consumers of today want to do business with responsible companies that prioritize various social, environmental, and ethical initiatives. In addition to the way it treats employees (explained below), the company has committed to purchasing 80% green energy by 2030.
Costco is also an extensive donator to charitable causes with a focus on programs that support children, education, health, and human services in the communities where it operates. The company also donates leftover food to the national non-profit Feeding America.
Technological
A traditional brick-and-mortar retailer, Costco has had to build out its eCommerce capabilities to cater to the needs of modern consumers.
The company now offers an app that enables consumers to make mobile payments, view receipts, access current promotions, manage prescription medication, create shopping lists, and view the current price of gas at their local store.
Consumers can also now shop on Costco.com where same-day delivery is offered in some areas.
Economic
As a low-cost retailer, the current economic environment of high inflation and high-interest rates is likely to benefit Costco as consumers look to save money. However, the company may be negatively impacted by the rising cost of labor – particularly since it offers a base rate of $17 per hour or almost $10 above the federally mandated minimum wage.
Environmental
In 2020, Costco faced a lawsuit over its handling of hazardous waste in California. The lawsuit alleged that Costco was improperly disposing of hazardous waste such as batteries and electronics, and was compliant with state regulations.
Nevertheless, the company currently follows a Climate Action Plan which provides a roadmap to reducing carbon dioxide-equivalent (CO2e) emissions. The plan addresses various United Nations Sustainable Development Goals (SDGs) and encompasses Costco’s worldwide operations.
Political
Costco has been an ardent supporter of changes to corporate tax policy in the United States. In 2017, for example, it advocated for a lower corporate tax rate on the basis that savings would fund new stores and infrastructure.
Like multinational competitor Walmart, it also expressed concerns about Trump-mandated tariffs on Chinese products in 2018.
Costco’s code of ethics is comprised of four key points:
Obey the law.
Take care of our customers.
Take care of our employees, and
Respect our suppliers.
Over the years, Costco has been praised as a “testimony to ethical capitalism” thanks in no small part to company practices, culture, and treatment of employees and key stakeholders. The company’s ethical standpoint is based on the belief that well-treated employees are more productive and thus contribute to the success of the organization.
STEEPLE analysis vs. PESTLE analysis
The PESTLE analysis is a strategic framework that is used to evaluate the environment in which an organization operates. Six separate factors are analyzed.
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.
The STEEPLE analysis also provides an overview of the macro-environmental factors that impact an organization.
It is an evolution or iteration of the PESTLE analysis because it analyzes the same six factors plus an additional seventh factor.
The PESTLE analysis is a framework businesses use to evaluate their operating environment.
It is a common component of enterprise risk management planning and is also used in product development and financial analysis.
The PESTLE analysis was developed in the late 1960s by American scholar and strategic planning expert Francis Aguilar.
At the time, it was known as the PEST analysis because it only considered political, economic, sociological, and technological factors.
The two additional factors of legal and environmental were added later, with all six factors able to be incorporated into other frameworks such as SWOT, the Ansoff matrix, and Porter’s 5 Forces.
These factors and some common drivers of each include:
Political – taxation, free trade, anti-trust or anti-competition issues.
Social – consumer trends and beliefs, working attitudes and conditions, and other demographic considerations.
Technological – infrastructure such as IoT, cybersecurity, automation, artificial intelligence, and research and development.
Environmental – carbon dioxide emissions, impacts of climate change, natural resources stewardship, impact of extreme weather events.
Legal – intellectual property and patents, employment law, consumer law, permits and licensing, and industry regulation.
To recap:
The PESTLE analysis is a strategic framework that is used to evaluate the environment in which an organization operates. The STEEPLE analysis also provides an overview of the macro-environmental factors that impact an organization but with an additional seventh factor.
The PESTLE analysis was developed in the late 1960s by American scholar and strategic planning expert Francis Aguilar. The original PEST analysis had only four factors, with two more added later.
The STEEPLE analysis is a further iteration of Aguilar’s work, with a crucial seventh “Ethical” factor added to encompass the multi-faceted area of business ethics.
Understanding the STEEP Analysis
The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.
In addition, to the five factors comprised in the STEEP Analysis, the STEEPLE analysis comprises:
L standing for Legal: What government laws will impact the way of doing business?
E standing for Ethical: Based on the current context and landscape what is perceived contextually to be good and bad as a business?
STEEPLE vs. SWOT vs. PESTEL
The STEEPLE analysis is a more comprehensive way to look at the current business context compared to other frameworks such as SWOT and PESTEL.
Whereas the STEEPLE analysis focuses on the external environment, the SWOT analysis is both externally looking (threats and opportunities) and internally looking (strengths and weaknesses).
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
Thus, from that standpoint, the SWOT analysis helps look at the external landscape and internal landscape through four elements:
On the other hand, similar to the STEEPLE analysis, the PESTEL analysis looks at the external environment and business context.
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.
The PESTEL analysis looks at the external environment via a few core elements:
The STEEPLE analysis is a tool that helps an organization evaluate its external environment with respect to seven key factors.
Unlike the SWOT analysis, there is scope in the STEEPLE approach to examine the various relationships between each of the factors.
Walmart’s STEEPLE analysis reveals the nature of some of these dependencies. Many of its environmental factors are tied to legal and ethical factors, for example.
What are the 7 STEEPLE factors?
The seven elements of the STEEPLE analysis comprise:
A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.
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The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.
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The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.
The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.
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Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
