Using STEEP to Frame Your Horizon Scanning.
STEEP analysis is a comprehensive framework for evaluating the impact of Social, Technological, Economic, Environmental, and Political external factors on a business. Each of these dimensions provides critical insights into the external environment that could influence a company's operations and strategic planning. STEEP is often used in horizon scanning, a systematic process for identifying and analysing external signals or early warnings that could affect an organisation's futures.
Through horizon scanning, businesses can monitor trends, emerging issues, and potential disruptions in the external environment. This analysis helps businesses to anticipate and adapt to changes, thereby improving their ability to make long-term decisions with more accuracy and greater reliability. By integrating STEEP analysis into their strategic thinking, organisations can better navigate uncertainties, leverage opportunities, and mitigate risks associated with external factors, ultimately enhancing their competitive advantage and sustainability.
Social factors are external influences impacting businesses and organisations, originating from society and consumers. These encompass social and cultural shifts, trends, and societal patterns. In your scanning you should look for reference data amongst demographic, societal, and human behavioral data. These elements are essential as they shed light on the prevailing societal attitudes that can affect how your business operates. For example, an ageing population may increase demand for healthcare services, while a growing interest in sustainability might drive businesses to adopt eco-friendly practices. Additionally, shifts in consumer behavior, such as the rise of remote work or increased online shopping, can significantly influence market dynamics and business strategies. Understanding these social factors is crucial for businesses to stay relevant and competitive in an ever-evolving environment.
Social factors to explore include:
Demographics, population shifts, migration, generations.
Standards of living.
Value systems.
Socio-economic conditions.
Education.
Ethic/religious factors.
Crime, safety and security.
Family.
Health.
Attitudes to work /employment.
Leisure.
Lifestyle changes.
Consumer attitudes/opinions.
Fashion trends.
Social media influence and trends.
Technological factors encompass variables related to the presence, accessibility, and evolution of technology. Broadly speaking, technological factors refer to advancements, innovations, and scientific breakthroughs that can impact the operations of individual businesses or entire industries. These factors may include the rate of technological change, the level of investment in research and development, the availability of new technologies, and the ability of businesses to adopt and integrate these technologies into their operations. Additionally, technological factors can influence competitive advantage, productivity, and efficiency, shaping the overall landscape of industries and markets.
Technology factors to explore include:
Technology for service delivery.
Technological developments generally, including emerging technologies.
Convergence, competition and dependencies.
Nanotechnology.
Information and communications.
Technology legislation.
Intellectual property rights and issues.
Automation and artificial intelligence.
Internet of Things (IoT).
Digital transformation and disruption.
E-commerce and online presence.
Cybersecurity and data privacy.
Economic factors impacting businesses and organisations encompass a wide range of external economic influences. These include global economic fluctuations, national economic shifts, and industry-specific financial trends and regulations. In your scanning you should look for reference data such as inflation, which can erode purchasing power and increase costs; taxes, which affect profitability and investment decisions; and interest rates, which influence borrowing costs and consumer spending. Additionally, consumer spending patterns, driven by confidence and disposable income, play a significant role. Monetary policies implemented by central banks can affect liquidity and credit availability. Overall economic growth, or the lack thereof, determines market opportunities and challenges. Each of these factors plays a crucial role in shaping the economic landscape that businesses must navigate, requiring them to remain agile and responsive to changing conditions.
Economic factors to explore include:
All aspects of economic activity, global, national or organisations.
Work and employment, occupations.
Consumer behaviour.
Globalisation , internationalisation and global trading.
Economic growth rates and consumer confidence.
Interest rates, taxation levels and inflation.
Currency exchange rates.
Commodity prices.
Environmental factors are external elements that affect the operations of a business or organisation. These encompass natural disasters, such as earthquakes, floods, and hurricanes, which can disrupt supply chains and operations. Climate changes, including global warming and shifts in weather patterns, can impact resource availability and operational stability. Environmental regulations and policies, imposed by governments and international bodies, dictate how businesses must manage their environmental footprint, ensuring compliance with laws. Sustainability practices involve adopting eco-friendly methods and reducing waste to minimize environmental harm. The overall environmental impact of a business or industry includes its carbon footprint, use of natural resources, and contributions to pollution, which can influence public perception and market positioning.
Environmental factors to explore include:
All natural factors.
Physical and geographical conditions.
Ecosystems.
Resources.
Sustainability practices.
Political factors encompass government policies on trade and taxation, general political issues, leadership changes, regulation, and political trends. These factors can significantly influence business operations and economic conditions. For instance, a change in leadership may result in new policies that could either benefit or hinder certain industries. It is crucial to consider elements such as government trade and taxation policies, regulatory trends, elections, and incentives. Additionally, international relations and geopolitical stability also play a critical role, as they can affect global trade agreements and economic sanctions. Understanding these aspects can help businesses anticipate and adapt to potential changes in the political landscape.
Political factors to explore include:
Global connections.
National factors.
Regional factors.
International factors.
References.
https://pestleanalysis.com/what-is-steep-analysis/
Conway, M. (2021) Environmental Scanning: What it is and how to do it. A Strategic Futures Guide from Foresight Futures. Melbourne, Australia
