STEEP Analysis Tool
Description: External environment factors such as down turns in the economy, and a lack of investment in innovation can have a significant impact on a firm's strategic options. To obtain a better glance of how these factors will affect the planning process, analysts can utilize the STEEP analysis tool. When used correctly, the tool will furnish decision makers with information which should be used to improve existing strategic plans. The STEEP analysis tool is a framework to gauge how the external environment will impact a given company's strategic plan to remain competitive. The five elements of STEEP analysis
The five elements of a STEEP analysis are reflected in name of the tool. * S – 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
* 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. * T – 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 – 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...