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 example

Below is a look at a sample STEEPLE analysis for Walmart, one of the world’s largest retailers.

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 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.

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. 

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.

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
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.

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

Other connected frameworks

Porter’s Five Forces

porter-five-forces
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces.

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.

BCG Matrix

bcg-matrix
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.

Balanced Scorecard

balanced-scorecard
First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.

Blue Ocean Strategy 

blue-ocean-strategy
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

Scenario Planning

scenario-planning
Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts to better strategic decision-making by avoiding two pitfalls: underprediction, and overprediction.

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