steeple-analysis

STEEPLE Analysis In A Nutshell

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.

walmart-business-model
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. 

Such is the technological prowess of Walmart that some believe it could become the next big tech company.

Economic

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.

In September 2021, for example, it raised the minimum wage by $1 an hour for 565,000 workers.

Environmental

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.

costco-business-model

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.

Legal

In 2013, employees from stores in Ontario, Canada, were accused of accepting $1.3 million in illegal kickbacks from pharmacists. The company was eventually fined $7 million by the Ontario government in 2019.

Costco was also subject to a lawsuit after it was alleged the retailer had sold diamond engagement rings under the Tiffany brand.

Tiffany accused Costco of counterfeiting and trademark infringement with the latter required to pay $21 million in damages and lost profit. However, Costco appealed the decision and had it overturned in 2020.

Ethical

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.

pestel-analysis
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:

  1. Political – taxation, free trade, anti-trust or anti-competition issues.
  2. Economic – inflation, currency exchange rates, interest rates, levels of unemployment.
  3. Social – consumer trends and beliefs, working attitudes and conditions, and other demographic considerations.
  4. Technological – infrastructure such as IoT, cybersecurity, automation, artificial intelligence, and research and development.
  5. Environmental – carbon dioxide emissions, impacts of climate change, natural resources stewardship, impact of extreme weather events.
  6. 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

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).

swot-analysis
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.

pestel-analysis
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:

Read Next: SWOT AnalysisPersonal SWOT AnalysisTOWS MatrixPESTEL AnalysisPorter’s Five ForcesTOWS MatrixSOAR Analysis.

Key takeaways

  • 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:

What's a STEEPLE analyis example?

Walmart is one of the world’s largest retailers:

  • Social factors encompass those related to consumer culture, lifestyle, and behavior, to name a few drivers. 
  • Walmart is not immune to the various technical factors impacting small and large organizations. 
  • Walmart has to contend with economic factors such as unemployment, international trade sanctions, inflation, and recession.
  • Walmart created the Project Gigaton project in 2017 to engage in climate action with suppliers, NGOs, and other key stakeholders.
  • Walmart benefits from the relative political stability of its biggest markets in the United States and Canada.
  •  Walmart must also deal with tax law reform, equal opportunity legislation, and the anti-competitive consumer watchdog. 
  • Walmart’s website’s ethics and compliance section clearly shows where the company stands on ethical factors. 

Connected Analysis Frameworks

Failure Mode And Effects Analysis

failure-mode-and-effects-analysis
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.

Agile Business Analysis

agile-business-analysis
Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Business Valuation

valuation
Business valuations involve a formal analysis of the key operational aspects of a business. A business valuation is an analysis used to determine the economic value of a business or company unit. It’s important to note that valuations are one part science and one part art. Analysts use professional judgment to consider the financial performance of a business with respect to local, national, or global economic conditions. They will also consider the total value of assets and liabilities, in addition to patented or proprietary technology.

Paired Comparison Analysis

paired-comparison-analysis
A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Monte Carlo Analysis

monte-carlo-analysis
The Monte Carlo analysis is a quantitative risk management technique. The Monte Carlo analysis was developed by nuclear scientist Stanislaw Ulam in 1940 as work progressed on the atom bomb. The analysis first considers the impact of certain risks on project management such as time or budgetary constraints. Then, a computerized mathematical output gives businesses a range of possible outcomes and their probability of occurrence.

Cost-Benefit Analysis

cost-benefit-analysis
A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

CATWOE Analysis

catwoe-analysis
The CATWOE analysis is a problem-solving strategy that asks businesses to look at an issue from six different perspectives. The CATWOE analysis is an in-depth and holistic approach to problem-solving because it enables businesses to consider all perspectives. This often forces management out of habitual ways of thinking that would otherwise hinder growth and profitability. Most importantly, the CATWOE analysis allows businesses to combine multiple perspectives into a single, unifying solution.

VTDF Framework

competitor-analysis
It’s possible to identify the key players that overlap with a company’s business model with a competitor analysis. This overlapping can be analyzed in terms of key customers, technologies, distribution, and financial models. When all those elements are analyzed, it is possible to map all the facets of competition for a tech business model to understand better where a business stands in the marketplace and its possible future developments.

Pareto Analysis

pareto-principle-pareto-analysis
The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Comparable Analysis

comparable-company-analysis
A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

SWOT Analysis

swot-analysis
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.

PESTEL Analysis

pestel-analysis
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.

Business Analysis

business-analysis
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.

Financial Structure

financial-structure
In corporate finance, the financial structure is how corporations finance their assets (usually either through debt or equity). For the sake of reverse engineering businesses, we want to look at three critical elements to determine the model used to sustain its assets: cost structure, profitability, and cash flow generation.

Financial Modeling

financial-modeling
Financial modeling involves the analysis of accounting, finance, and business data to predict future financial performance. Financial modeling is often used in valuation, which consists of estimating the value in dollar terms of a company based on several parameters. Some of the most common financial models comprise discounted cash flows, the M&A model, and the CCA model.

Value Investing

value-investing
Value investing is an investment philosophy that looks at companies’ fundamentals, to discover those companies whose intrinsic value is higher than what the market is currently pricing, in short value investing tries to evaluate a business by starting by its fundamentals.

Buffet Indicator

buffet-indicator
The Buffet Indicator is a measure of the total value of all publicly-traded stocks in a country divided by that country’s GDP. It’s a measure and ratio to evaluate whether a market is undervalued or overvalued. It’s one of Warren Buffet’s favorite measures as a warning that financial markets might be overvalued and riskier.

Financial Analysis

financial-accounting
Financial accounting is a subdiscipline within accounting that helps organizations provide reporting related to three critical areas of a business: its assets and liabilities (balance sheet), its revenues and expenses (income statement), and its cash flows (cash flow statement). Together those areas can be used for internal and external purposes.

Post-Mortem Analysis

post-mortem-analysis
Post-mortem analyses review projects from start to finish to determine process improvements and ensure that inefficiencies are not repeated in the future. In the Project Management Book of Knowledge (PMBOK), this process is referred to as “lessons learned”.

Retrospective Analysis

retrospective-analysis
Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle.

Root Cause Analysis

root-cause-analysis
In essence, a root cause analysis involves the identification of problem root causes to devise the most effective solutions. Note that the root cause is an underlying factor that sets the problem in motion or causes a particular situation such as non-conformance.

Blindspot Analysis

blindspot-analysis

Break-even Analysis

break-even-analysis
A break-even analysis is commonly used to determine the point at which a new product or service will become profitable. The analysis is a financial calculation that tells the business how many products it must sell to cover its production costs.  A break-even analysis is a small business accounting process that tells the business what it needs to do to break even or recoup its initial investment. 

Decision Analysis

decision-analysis
Stanford University Professor Ronald A. Howard first defined decision analysis as a profession in 1964. Over the ensuing decades, Howard has supervised many doctoral theses on the subject across topics including nuclear waste disposal, investment planning, hurricane seeding, and research strategy. Decision analysis (DA) is a systematic, visual, and quantitative decision-making approach where all aspects of a decision are evaluated before making an optimal choice.

DESTEP Analysis

destep-analysis
A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.

STEEP Analysis

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.

STEEPLE Analysis

steeple-analysis
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.

Activity-Based Management

activity-based-management-abm
Activity-based management (ABM) is a framework for determining the profitability of every aspect of a business. The end goal is to maximize organizational strengths while minimizing or eliminating weaknesses. Activity-based management can be described in the following steps: identification and analysis, evaluation and identification of areas of improvement.

PMESII-PT Analysis

pmesii-pt
PMESII-PT is a tool that helps users organize large amounts of operations information. PMESII-PT is an environmental scanning and monitoring technique, like the SWOT, PESTLE, and QUEST analysis. Developed by the United States Army, used as a way to execute a more complex strategy in foreign countries with a complex and uncertain context to map.

SPACE Analysis

space-analysis
The SPACE (Strategic Position and Action Evaluation) analysis was developed by strategy academics Alan Rowe, Richard Mason, Karl Dickel, Richard Mann, and Robert Mockler. The particular focus of this framework is strategy formation as it relates to the competitive position of an organization. The SPACE analysis is a technique used in strategic management and planning. 

Lotus Diagram

lotus-diagram
A lotus diagram is a creative tool for ideation and brainstorming. The diagram identifies the key concepts from a broad topic for simple analysis or prioritization.

Functional Decomposition

functional-decomposition
Functional decomposition is an analysis method where complex processes are examined by dividing them into their constituent parts. According to the Business Analysis Body of Knowledge (BABOK), functional decomposition “helps manage complexity and reduce uncertainty by breaking down processes, systems, functional areas, or deliverables into their simpler constituent parts and allowing each part to be analyzed independently.”

Multi-Criteria Analysis

multi-criteria-analysis
The multi-criteria analysis provides a systematic approach for ranking adaptation options against multiple decision criteria. These criteria are weighted to reflect their importance relative to other criteria. A multi-criteria analysis (MCA) is a decision-making framework suited to solving problems with many alternative courses of action.

Stakeholder Analysis

stakeholder-analysis
A stakeholder analysis is a process where the participation, interest, and influence level of key project stakeholders is identified. A stakeholder analysis is used to leverage the support of key personnel and purposefully align project teams with wider organizational goals. The analysis can also be used to resolve potential sources of conflict before project commencement.

Strategic Analysis

strategic-analysis
Strategic analysis is a process to understand the organization’s environment and competitive landscape to formulate informed business decisions, to plan for the organizational structure and long-term direction. Strategic planning is also useful to experiment with business model design and assess the fit with the long-term vision of the business.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesPorter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF FrameworkBCG MatrixGE McKinsey MatrixKotter’s 8-Step Change Model.

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