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.

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.

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.

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