The STEEP analysis is a tool used to map the external factors that impact an organization. The STEEP analysis gives a business perspective on the market it operates in.
STEEP stands for the 5 key areas on which the analysis focuses:
S – socio-cultural,
T – technological,
E – economic,
E – environmental/ecological, and
P – political.
Understanding the STEEP analysis
In business, the external environment is driven by multiple factors that an organization has no direct control over. Thus, STEEP analysis triggers discussion on the various societal factors that may impede future growth.
It is important for every business to consider some external forces before they can take decisions. Business can evaluate the business feasibility through STEEP analysis. Also, STEEP analysis allows decision makers to make decisions based on fact. This is because each factor has the potential to force decision-makers to act quickly without duly considering the consequences.