Developed by Professor Francis J. Aguilar at Harvard Business School.
An environmental framework to assess external factors affecting a business.
Variants include PEST, PESTEL, and PESTLE, differing in the number of factors considered.
Focuses on overall strategy and is essential for strategic planning.
Examines external conditions that the company cannot control.
STEEPLE is an acronym for seven macro-environmental factors.
The STEEPLE Acronym
S: Sociodemographic
T: Technological
E: Economic
E: Environmental
P: Political
L: Legal
E: Ethical
1. Sociodemographic Factors
Refers to sociocultural and demographic conditions in the country.
Concerns culture, values, attitudes, and norms of a country's population.
Essential to understand culture when dealing with other countries.
Theories for analyzing culture include Edgar Schein's Cultural Analysis and Geert Hofstede's Cultural Dimensions.
Factors that are always part of a country's culture:
Economic System: How the economic system works.
Family Relations and Marriage: Norms around living arrangements and family structures.
Education System: How the education system works and its level.
Social Conditions: What is considered acceptable in society.
Relationship with the Supernatural: Beliefs related to the supernatural.
2. Technological Factors
Refers to technological developments influencing companies.
Technological development is rapidly changing business.
Includes new methods of production, distribution, and communication.
Examples: Artificial intelligence and drones.
Artificial Intelligence: Potential to radically change our way of living.
Drones: Used in video recording, surveillance, war, and delivery.
3. Economic Factors
Refers to the socioeconomic situation in the country.
Influences how business is done and profit opportunities.
Factors:
Economic growth rate
Exchange rates
Interest rates
Inflation rate
Purchasing power (disposable income)
Can be divided into:
Macroeconomic factors: Taxation, public expenditure, investments; comparisons between GDP growth and unemployment.
Microeconomic factors: Distribution of population's demand between goods and services, crucial for B2C and B2B markets.
4. Environmental Factors
Companies affect their surroundings and are affected by the world around them.
Factors:
Legislation for environmental protection
Management of wastes and their disposal
Water and air pollution
Energy-efficient technologies
Ecology in society
Continuous new demands:
ESG reporting
Green accounts
CSR reports
The 17 global goals
5. Political Factors
Refers to political decisions affecting the company.
Factors:
Political stability
Labor market legislation
Taxes and levies
Analysis of government, foreign governments, and international organizations affect the country's economy.
Import and export policy
Tax policy
Environmental legislation
World Trade Organization rules influencing a country's legislation.
Politicians' decisions can:
Initiate business promotion activities.
Set aside money to educate young people.
Revise the tax policy.
Increase public investment.
Legislation from the European Union may affect a company's possibilities.
6. Legal Factors
Refers to laws, regulations, and taxes affecting the company.
Includes legislation on:
Equality
Working environment and safety
Labeling of products
Product safety
Consumer rights
Complexity is high in international trade due to differences between countries.
Example: Novo Nordisk facing different regulations for drug approval in Denmark and the United States.
7. Ethical Factors
Refers to ethical norms and values influencing the company's behavior.
Linked to the company's CSR strategy.
Concerns marketing methods, recruitment, and hiring practices.
Child labor is an ethical problem.
How to Use the STEEPLE Analysis Model
Include and evaluate only concrete and relevant factors.
Suitable for keeping updated on societal developments.
Relevant when evaluating a new market.
Three stages:
Stage 1: Identify relevant factors from each area.
Stage 2: Gather relevant information and analyze it.
Stage 3: Determine which factors to consider in future planning.
STEEPLE Analysis Example: Car Dealer in Rural Denmark
Social Demographic: Shift to electric cars; area has lower incomes and limited education, so inform about electric car characteristics and financial benefits.
Technological: Shift from petrol to electric cars changes the industry so it's important to have technically skilled employees.
Economic: Inflation can threaten purchasing power for electric cars.
Environmental: Electric cars are environmentally friendly.
Political: Electric cars are supported by various schemes.
Legal: Legislation accommodates electric cars with driving bans for older diesel cars and free parking in cities.
Ethical: No significant ethical issues.
STEEPLE Analysis Conclusion (Car Dealer Example)
External factors favor the sale of electric cars (technological, legislative, political).
Challenges in the dealer's area to find customers willing to buy electric cars.
Staff may need retraining or replacement.
Critique of the STEEPLE Model
Risk of overlapping factors (e.g., social and political).
Subjectivity in integrating ethical factors.
Treats all factors equally without prioritizing impact.
Assumes a static environment.
Summary
STEEPLE model provides insights but has limitations.
Consider complementary approaches for a comprehensive analysis.