STEEPLE analysis

• STEEPLE analysis: acronym standing for social, technological, economic, environmental, political, legal and ethical external factors that impact on business; it refers to a framework for analyzing the external environmental factors affecting business objectives and strategies.

• STEEPLE analysis for McDonald’s restaurants (example)

  • Social issues:

    • How are dietary trends changing and how different are customer tastes from those in other countries (e.g. cultural and religious factors)?

    • What proportion of couples both work less time to prepare meals?

    • Growing health consciousness - is the demand for healthy foods increasing?

    • Is the population aging? Do the elderly buy more or fewer fast-food meals than the young? Is the population growing?

  • Technological issues:

    • Can the food production process be automated? Is technical support available?

    • Online selling - is full internet/broadband coverage available? Will customers order online?

    • Are IT support services available locally?

  • Economic issues:

    • Economic growth - is this slowing or even negative (recession)?

    • Unemployment - is this rising and reducing consumer incomes? Interest rates are these high or low?

    • Exchange rate - is this likely to appreciate or depreciate?

    • Is the government’s fiscal policy likely to lead to increases or reductions in consumer incomes?

  • Environmental issues:

    • Environment - is environmentally friendly packaging technically possible and available In this country?

    • Are waste-recycling facilities available?

    • Is sustainable/renewable energy available in this country?

    • Are environmental pressure groups powerful in this country?

  • Political issues:

    • Is the government stable and are there likely to be any demonstrations against the government?

    • Are government grants available for setting up In the country?

    • Is the government committed to increasing or reducing taxes?

    • Does the country belong to a free-trade area or political unions?

    • Does the government put tariffs or quotas on imported goods? For example, supplies needed from the USA for McDonald's restaurants.

  • Legal issues:

    • Political stability of the country is civil unrest likely

    • Employee and consumer protection laws - how restrictive are these, e.g. health and safety laws?

    • Trade restrictions or membership of free trade bloc - can food be imported without tariffs?

    • Environmental regulations - what forms of packaging of fast food are allowed?

    • Health concerns about fast food - could the government pass new laws about the contents of fast-food products?

  • Ethical issues:

    • Are there any high ethical standards in public and commercial in this country?

    • Do suppliers treat workers ethically?

    • Is bribery and corruption widespread in this country?

Impact of technology

• Impact on objectives and strategies:

  • Focus on new product development

  • Improve stakeholder communication

  • Developing new and better processes

  • Cost benefits

  • Competitive advantage

  • Outsourcing and offshoring - the impact of globalization

• Economic influences:

  • Economic growth and recession

  • Interest rates - the use of monetary policy

  • Exchange rates - increases (appreciation) and decreases (depreciation) in the value of a currency value against other currencies

  • Tax changes through the use of fiscal policy

  • Unemployment

  • Inflation (cost-push and demand-pull)

• Environmental influences:

  • Environmental controls on business activities such as waste disposal, use of sustainable energy, reducing packaging

  • Threats from natural events such as drought, earthquakes and floods

  • Natural resources

  • Infrastructure road and air transport facilities, for example

• Political influences:

  • Government stability

  • Form of political structure, e.g. democracy

  • Government’s attitude to private ownership

  • Trade policies and membership of free-trade areas or Customs Unions (e.g. EU)

• Legal influences:

  • Improved employee legal protection, e.g. better health and safety at work, redundancy pay, protection from discrimination, minimum pay levels, maternity pay

  • Consumer protection laws that constrain businesses from advertising inaccurately or inappropriately, selling faulty goods or those described incorrectly, high-pressure selling tactics, not allowing consumers to change their minds after signing credit agreements

  • Competition laws can restrict unfair competition or restrictive practices by businesses, monopoly exploitation of consumers, mergers and takeovers (external growth) that could lead to a monopoly.

• Ethical influences:

  • National differences in the values and attitudes held by the majority of the population