5 terms

STEEP Analysis

Social: The social element of the external environment takes into account the aspects that describe society as a whole. Some of the key elements that organizations must deal with in each market are: Demographics, Lifestyles, Religion, Education, Age distribution of the population. Changes in the social environment can create havoc on an established strategic plan. Analysts must be careful when monitoring trends in society to arrive at the correct conclusions.
Technological: Industries that rely on technological advances to generate new products and services are prone to be affected by rapid changes in the environment. It is the job of analysts to monitor and measure the effects the changes within the technological environment will have on their respective product-development strategies. This task may take years to conduct depending on how the industry is driven by innovation.
E 1
Economic: The economic environment contains aspects dealing with individuals' capacity to obtain products or services given the set of economic conditions. Analysts must properly assess how consumers will react when there are changes within the environment and how their firm should adjust their strategy to remain competitive given the circumstances.
E 2
Ecological: The ecological element considers the present-day situation of the physical and biological environments that companies can face. Companies which make use of natural resources in producing goods should devote a great amount of time examining the ecological environment of each country in which they are offering their goods and services. Without the correct information, companies can be fined and refused the right to operate in certain regions around the globe.
Political / Legal: This element of the analysis consists of understanding the political and legal environments of a specific country or region where companies select to operate. Failure to understand and adapt to the political and legal environments will result in overcoming barriers which may be too costly to deal with, given the expected return on investment.