Unit 1.5 (External environment)

Question 1

Steeple

Answer 1

STEEPLE
 Business tool for understanding a business’ external environment
 Looks at the market potential and situation
 Stands for Social, Technological, Economic, Environmental, Political, Legal, and
Ethical analysis (of the industry)
 External environmental factors are analyzed in decision making and strategy
development because they can heavily influence the business
 Social
 Attitude of society towards wide range of issues
 Population demographics (more young/old, more women/men, etc.)
 Roles and attitudes of people
 Cultural and religious beliefs
 Security and education
 Technological
 Use of tools and machines
 Information technology
 Innovations in technology
 Economic
 State of the economy
 Interest and tax rates
 Exchange rates and foreign relations
 Inflation rates, unemployment rates, etc.
 Environmental
 Abundance of natural resources or raw materials
 Threats from nature (or natural disasters)
 Waste disposal/recycling
 Political
 Laws (employment, consumer, business) & policies (fiscal and monetary)
 Changes brought about by new government
 Possible effects of political unrest
 Legal
 Employment or contract laws
 Trade unions
 Environmental protection regulations
 Ethical
 Client confidentiality
 Bribery and other forms unethical (and possibly illegal) business transactions
 Fair competition

Question 2

How changes in STEEPLE factors affect a business’s objective and strategy

Answer 2

How changes in STEEPLE factors affect a business’s objective and strategy
 Changes in trends, social norms, public opinion, views on ethics can affect the
company’s products, business activities, and the way they market their products
 Changes to legal or political factors may force businesses to change the way
they operate to comply with new laws or regulations

 Changes to technological factors could result to the company adopting newer
technology or machinery to increase efficiency or keep up with industry
standards
 Changes to environmental factors could force companies to adapt to scarce raw
materials, frequent natural disasters, etc.
 Changes to economic factors (economic growth, interest rates, etc.) could affect
the costs of operations of the business, spending attitude of consumers, etc.