Steep Analysis

A strategy tool to map and assess the dependencies of different factors and their consequences within a company or system.

The STEEP analysis, also called PESTE analysis, is a strategy of external environmental analysis for companies. It lists the factors of the individual categories that may influence the unit under investigation. STEEP is an English acronym for Sociological, Technological, Economical, Environmental and Political. In the analysis, the factors are examined socially, technologically, economically, ecologically, politically and their mutual dependencies.

The analyzed facts are then selected and weighted according to the problem.

Social factors include: values, attitudes, lifestyles, consumer trends, demographic influences, income distribution, education, population development, security. Aspects within society such as family, friends, colleagues, neighbors and the media.

Technological factors include: new technologies, technology effects, research, development speed, new products and processes, product lifecycles, technology investments, and government research expenditure.

Economic factors include: economic growth, inflation, interest rates, exchange rates, taxation, unemployment, income, business cycles, world trade and resource availability.

Environmental factors include: material, resources, disposal, emission regulations, energy, transport routes, life cycles, effects of the ozone hole and global warming.

Political factors include: policy frameworks, labor market policies, government policies, competition oversight, legislation, political stability, tax policies, trade barriers, security requirements and subsidies.

There are mutual dependencies between the individual factors, i.e. that a change in one area can also lead to changes in other areas. For example, technological changes can have economic consequences or political decisions influence economic development. 

For each of the five categories of influence mentioned, the following questions should be asked to identify the factors that cause change: What future trends could change the demand and market behavior of our actual and potential users? When will this be the time. 

Subsequently, an action scenario can be built up in the strategy. The STEEP analysis should not only be done static, but should be done over time to detect changes and developments.

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