STEEP is an acronym that stands for Social, Technological, Economical, Environmental and Political. STEEP is generally used in marketing to analyze external elements that affect an organization. It helps organizations take into account external forces before decisions are made. Additional acronyms derived from STEEP include PEST, PESTLE, PESTEL and STEP.
A STEEP analysis is frequently performed by organizations to obtain a comprehensive report on what external factors impact or set trends. Additionally, it helps forecast what may occur in the future. The breakdown:
Social: Social developments include factors like consumer behavior demographics, religion, lifestyles, values and advertising.
Technological: Includes technological aspects such as research and development activity, automation, technology incentives and the rate of technological change. These can affect the barriers to entry, minimum efficient production level and impact outsourcing decisions. Moreover, technological shifts can impact costs, quality and lead to innovation.
Economic: Includes elements that substantially influence how organizations operate and make decisions. These elements include economic growth, interest rates, exchange rates and inflation rate. The economic condition is greatly related to the buying position of the consumers.
Environmental: Environmental developments include ecological and environmental factors such as water, wind, food, soil, energy, pollution and environmental regulations.
Political: Political developments can substantially influence people and companies. It is imperative to be conscious of impending shifts in power. Political developments can affect environmental, antitrust, financial markets, trade and various other laws. Factors to examine include political stability, regulation of monopolies, tax policies, price regulations consumer protection, jurisdiction and trade unions.
Companies who desire to examine the developments in the external (contextual) macro environment should consider incorporating a STEEP analysis. Organizations are likely to achieve greater insight into past, present and future external environment developments during times of uncertainty, periods of information overload and disorganization.