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.
|1. Overview||STEEPLE Analysis is a strategic planning framework used to examine the external macro-environmental factors that impact an organization or project.||– Evaluate the key factors within the categories of Social, Technological, Economic, Environmental, Political, Legal, and Ethical. – Analyze how each factor may affect the organization or project.||– Provides a comprehensive view of external forces shaping strategies. – Helps in proactive planning for potential changes in the environment.||– Strategic planning for organizations navigating a changing market. – Assessing the impact of external factors on a project’s feasibility. – Environmental scanning to identify market trends and risks.||Analyzing how changing environmental regulations (Environmental) may affect a manufacturing company’s operations. Assessing the potential impact of new data privacy laws (Legal) on a tech startup.|
|2. Social Factors (S)||Social factors include societal and demographic influences on an organization, such as cultural trends, consumer behaviors, and social attitudes.||– Identify and analyze social trends, consumer preferences, demographics, and cultural shifts that affect the organization or project. – Consider potential societal changes.||– Helps organizations adapt to changing customer behaviors and preferences. – Influences marketing strategies and product development.||– Assessing consumer preferences for a product launch. – Identifying cultural shifts that may impact marketing campaigns. – Understanding demographics to target specific market segments.||Recognizing a growing preference for eco-friendly products (S) and its impact on consumer choices. Assessing the changing work-from-home trend (S) and its implications for office space demand.|
|3. Technological Factors (T)||Technological factors involve advancements and innovations that can influence an organization’s operations, products, or services.||– Identify and assess technological innovations, trends, and disruptions that may impact the organization or project. – Consider the rate of technological change.||– Drives innovation and competitiveness by adopting emerging technologies. – Helps in technology planning and adaptation to industry changes.||– Evaluating the potential of artificial intelligence in streamlining operations. – Assessing cybersecurity threats and measures in a technology project. – Identifying opportunities in the Internet of Things (IoT) for a smart city project.||Recognizing the potential of 5G technology (T) for faster data transmission and its impact on mobile services. Assessing the implications of blockchain technology (T) for secure data management.|
|4. Economic Factors (E)||Economic factors encompass economic conditions, trends, and indicators that can impact an organization’s financial performance and decision-making.||– Evaluate economic indicators, inflation rates, interest rates, currency exchange rates, and market conditions affecting the organization or project. – Assess economic trends.||– Guides financial planning and budgeting based on economic forecasts. – Helps in risk assessment related to economic fluctuations.||– Analyzing currency exchange rate fluctuations for international business expansion. – Assessing the impact of economic recessions on consumer spending patterns. – Evaluating inflation rates for pricing strategies in a retail business.||Recognizing the potential impact of a recession (E) on consumer spending habits and adjusting pricing strategies accordingly. Assessing currency exchange rate fluctuations (E) and their implications for an international supply chain.|
|5. Environmental Factors (E)||Environmental factors pertain to ecological and sustainability considerations, including climate change, environmental regulations, and ecological trends.||– Identify and analyze environmental regulations, climate change impacts, sustainability trends, and ecological factors relevant to the organization or project.||– Encourages sustainability initiatives and compliance with environmental regulations. – Prepares for the potential effects of climate change on operations.||– Assessing the environmental impact of a manufacturing process and compliance with regulations. – Identifying opportunities for sustainability initiatives in product development. – Evaluating the risk of natural disasters on a project’s location.||Recognizing stricter environmental regulations (E) and the need for sustainable practices in manufacturing. Assessing the impact of climate change (E) on supply chain disruptions.|
|6. Political Factors (P)||Political factors encompass government policies, regulations, and political stability that can influence business operations, trade, and market access.||– Identify and analyze political factors such as government policies, regulations, trade agreements, and political stability that affect the organization or project.||– Guides compliance with government regulations and trade policies. – Assesses political risks and their impact on market access and stability.||– Assessing the impact of trade tariffs (P) on international supply chains. – Evaluating regulatory changes (P) affecting the pharmaceutical industry. – Understanding political stability (P) for market entry strategies.||Recognizing changes in trade policies (P) and their impact on import/export strategies. Assessing the influence of new government regulations (P) on the energy sector.|
|7. Legal Factors (L)||Legal factors involve laws, regulations, and legal issues that can affect business operations, contractual agreements, and compliance requirements.||– Identify and assess legal factors, including laws, regulations, industry standards, contractual obligations, and potential legal risks. – Consider legal compliance.||– Ensures compliance with laws and regulations governing the industry. – Helps in managing legal risks and contractual obligations effectively.||– Assessing data protection laws (L) for compliance in a tech startup. – Identifying intellectual property rights (L) for product development and protection. – Evaluating labor laws (L) for HR policies and practices.||Recognizing new data privacy regulations (L) and their impact on data handling practices. Assessing potential patent infringement risks (L) in a new product launch.|
|8. Ethical Factors (E)||Ethical factors relate to moral values, ethical principles, and social responsibility considerations that can affect an organization’s reputation and practices.||– Identify and assess ethical factors, including corporate social responsibility (CSR), ethical standards, and ethical challenges relevant to the organization or project.||– Guides ethical decision-making and corporate responsibility initiatives. – Ensures alignment with ethical principles and values.||– Assessing ethical practices in the supply chain (E) for sustainable sourcing. – Identifying CSR opportunities (E) that align with the organization’s values. – Evaluating ethical challenges (E) related to data privacy and consumer trust.||Recognizing the importance of ethical sourcing (E) and its impact on brand reputation. Assessing the potential ethical challenges (E) in handling sensitive customer data.|
Understanding the STEEPLE analysis
The STEEPLE analysis is a tool that helps an organization evaluate its external environment with respect to eight key factors.
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
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.
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.
Such is the technological prowess of Walmart that some believe it could become the next big tech company.
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.
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.
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.
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.
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
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.
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.
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.
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.
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.
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.
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.
Patagonia STEEPLE analysis
In this additional STEEPLE analysis example, we will analyze the sustainable outdoor and clothing company Patagonia.
One of the most obvious social factors for Patagonia is the increasing consumer interest in sustainable and ethical practices in the fashion industry.
The company’s commitment to environmental sustainability and ethical labor practices has helped it build a strong reputation and brand loyalty among conscious consumers.
Patagonia has walked the walk in this regard, donating 1% of its sales to international and grassroots environmental causes since 1985.
The company also conducts due-diligence activities to promote and sustain safe working conditions and fair labor practices across its supplier network.
Patagonia has used technology in various ways to reduce waste, improve the online customer experience, and develop new materials and manufacturing methods.
Much of the innovation in the outdoor apparel industry is focused on developing items that are breathable, warm, waterproof, durable, and fast-drying. These are features modern consumers expect, and an area in which Patagonia has been a leader for decades.
The company utilizes 20 machines in its fabric laboratory in Venture, California to test the aforementioned features across different materials.
There are also more than 20 scientists in the facility who rely on the science-based approach to develop technology that reduces the company’s ecological footprint.
The increased cost of raw materials and production may impact the company’s profitability, but Patagonia is perhaps more shielded than some of its competitors.
For one, some 69% of the company’s raw materials are made with recycled inputs. In the future, Patagonia will use 100% renewable and recycled materials from pre and post-consumer waste.
Patagonia’s commitment to sustainability and ethical practices has also led to growing popularity among consumers, and this has translated to increased sales and revenue.
In fact, the company has proven that a sustainability-centric business model can still be profitable.
As noted, Patagonia has built its brand around environmental responsibility and sustainability. The company was one of the earliest to promote environmental values and continues this tradition today.
Its Don’t Buy This Jacket re-use campaign was proof the company considered the environment to be more important than profit.
In late 2022, Patagonia founder Yvon Chouinard transferred ownership of Patagonia to a trust and a non-profit organization.
In the process, the company would remain independent indefinitely and all profits would be directed to protect undeveloped land and tackle climate change-related problems.
Nevertheless, with just 1% of used clothing recycled into something new each year, Patagonia has a difficult task ahead as it seeks to institute industry-wide environmental change.
Patagonia’s stance on various environmental and social issues means it often finds itself in the political sphere. In December 2017, the company condemned then-president Trump after he removed federal protection from broad swathes of public land in Utah.
After an almost 12-month war with Trump, Patagonia lodged a lawsuit in Washington. The company also ran the first television commercial in its 45-year history with Chouinard condemning anyone that would want to exploit Utah’s natural resources.
Patagonia does not operate its own factories and thus has no control over labor laws in other countries.
However, through its Fair Trade program, the company supports 75,000 factory workers from 10 nations as part of efforts to ensure that all who are associated with Patagonia can earn a living wage.
Patagonia is a highly ethical business that strives to do right for its customers, stakeholders, suppliers, employees, and the Earth.
The brand lives up to its own robust ethical standards which are promoted and upheld across every facet of the business.
Patagonia is one organization that could never be accused of greenwashing.
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 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.
These factors and some common drivers of each include:
- Political – taxation, free trade, anti-trust or anti-competition issues.
- Economic – inflation, currency exchange rates, interest rates, levels of unemployment.
- 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.
- 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
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
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).
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 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.
- STEEPLE Analysis Overview:
- STEEPLE stands for Socio-Cultural, Technological, Economic, Environmental/Ecological, Political, Legal, and Ethical factors.
- It’s a strategic tool used to assess an organization’s external environment and identify key influences.
- Comprehensive Examination:
- STEEPLE is more comprehensive than some other analysis frameworks like SWOT and PESTEL.
- It considers a wider range of factors, including legal and ethical dimensions.
- Relationships Between Factors:
- Unlike SWOT, STEEPLE allows for examining relationships between factors.
- This helps in understanding how different factors interact and influence each other.
- Real-World Application:
- Case studies like Walmart, Costco, and Patagonia demonstrate how STEEPLE analysis can be applied to real organizations.
- It provides insights into how external factors impact business decisions.
- Socio-Cultural Factors:
- Examines consumer culture, lifestyle, behavior, and societal drivers.
- Considers trends, preferences, and attitudes that influence business strategies.
- Technological Factors:
- Focuses on technological advancements and their impact on operations.
- Considers automation, innovation, digital platforms, and integration of technology.
- Economic Factors:
- Addresses economic conditions, inflation, trade, unemployment, and recession.
- Considers the financial landscape and its effects on business operations.
- Environmental/Ecological Factors:
- Examines environmental impact, sustainability efforts, and resource management.
- Considers initiatives to address climate change and ethical responsibility.
- Political Factors:
- Focuses on political stability, government policies, and regulations.
- Considers influences on business operations and market entry.
- Legal Factors:
- Addresses legal implications, regulations, and compliance.
- Considers legal issues, employment laws, and industry regulations.
- Ethical Factors:
- Examines ethical considerations, trust, integrity, and corporate social responsibility.
- Considers business practices that align with ethical values.
- Comparisons with Other Frameworks:
- Contrasts with SWOT and PESTEL analyses.
- Provides a more in-depth external perspective and relationships between factors.
- Strategic Decision-Making:
- STEEPLE analysis informs strategic decision-making by understanding external influences.
- Helps organizations adapt to changing environments and make informed choices.
What are the 7 STEEPLE factors?
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
Related Strategy Concepts: Go-To-Market Strategy, Marketing Strategy, Business Models, Tech Business Models, Jobs-To-Be Done, Design Thinking, Lean Startup Canvas, Value Chain, Value Proposition Canvas, Balanced Scorecard, Business Model Canvas, SWOT Analysis, Growth Hacking, Bundling, Unbundling, Bootstrapping, Venture Capital, Porter’s Five Forces, Porter’s Generic Strategies, Porter’s Five Forces, PESTEL Analysis, SWOT, Porter’s Diamond Model, Ansoff, Technology Adoption Curve, TOWS, SOAR, Balanced Scorecard, OKR, Agile Methodology, Value Proposition, VTDF Framework, BCG Matrix, GE McKinsey Matrix, Kotter’s 8-Step Change Model.