Activity 16
Macroenvironmental analysis (STEEPLE)

Figure 3.4 Macroenvironmental analysis

Overview

‘STEEPLE’ is a mnemonic representing the macroenvironmental factors that need to be considered when analysing a category. It is a framework for review particularly in relation to strategic planning, market positioning or category development.

Each of the letters within the ‘STEEPLE’ framework represents a different factor within the external environment (i.e. sociocultural, technological, economic, ecological, political, legislative and ethical) that, although beyond the organisation’s direct control, is still an influence upon its activities.

The framework tends to be overused within business schools and has taken on many different forms over the years, including PEST (political, economic, sociocultural and technological), SLEPT (sociocultural, legislative, economic, political and technological) and PESTLE (political, economic, sociocultural, technological, legislative and ecological), amongst others. These differences are relatively minor, as each variant seems to incorporate the others’ elements in some shape or form.

Elements

Each of the STEEPLE factors varies in significance depending upon the category being analysed; however, in general terms the elements are as follows:

• Sociocultural environment – This highlights the importance of demographics, society and culture on a business.
• Technological environment – This focuses on the rate of innovation and diffusion, as well as the development of technical standards.
• Economic environment – This considers fiscal policies such as taxes, lending and exchange rates and inflation.
• Ecological environment – This covers the influence of the natural world and the awareness of the demand for raw materials and the use of energy, as well as disposal of waste.
• Political environment – This includes issues such as local and national government actions, trade relations and political stability.
• Legislative environment – This covers legislation and regulations, including aspects of governance, contracts, compliance and public accountability.
• Ethical environment – This includes ethical considerations, such as fair trade, ethical trade, modern slavery and bribery.

So what?

The STEEPLE template promotes proactive thinking rather than reliance upon habitual or instinctive reactions. By defining each environmental factor, this allows for a detailed review of potential impacts upon a category of spend.

STEEPLE analysis can help identify SWOT factors (Activity 15) and support the analysis required to understand an organisation’s strategic position when developing category strategies.

Category management application

• Supports category analysis preparation prior to strategy development
• Aids understanding of macroenvironmental factors of existing and potential category supplier organisations
• Builds general commercial awareness
• Promotes wider thinking around potential risks associated with the category strategy

Limitations

It is important to identify and define the subject of STEEPLE analysis clearly; otherwise the resulting output could be too wide and varied to explore.

Many academics prefer the original PEST model, as it is thought that it offers more opportunity for strategic appreciation and analysis, rather than simply a longer list of headings.

Either way, it should be noted that this model is merely a list of headings, as opposed to an analytical or predictive tool in itself. It provides a useful guide and aides memory, but should not be relied on for much more than this.

Template

The following template can be used to support category analysis:

• Template 16: STEEPLE