The STEEP Analysis is used in marketing, it is a method to analyse the macro-economy of the firm to determine which factors can influence its success. This model is the updated, ‘modern’ version of the ‘PEST ’ model and plays a very important role in the companies’ marketing strategy.
What about the micro-economy?
- The analysis which can analyse the micro-economy of the company is the SWOT.
The word itself, STEEP is an acronym for the following words:
- Political (and legislative)
Basically anything can fit into these ‘categories’, so once this analysis is done, the firm can have a detailed overview on what factors determine the present trends and what can be predicted for the future.
In the following points you can find most of the important factors that can determine the above mentioned macro-economy. Companies usually have no influence on these factors, so they have to accept them and somehow try to adapt them and also try to take great advantage of them.
- population of the consumers
- age of the consumers
- sex of the consumers
- marital status of the consumers
- educational level of the consumers
- profession, residence of the consumers
- ethnicity of the consumers
- habits of consumers
- the extent of local migration/mobility
- social values
- approach of consumers
- number of births
- changes in technology
- patent regulations
- life-cycle of products
- extent of economical growth
- income of the consumers
- exchange rates
- loans and the conditions to get a loan
- rate of unemployment
- rate of investments
- price of energy
- natural resources
- the price to exploit these resources
- protecting the environment
- environmental regulations
Political and legislative factors
- political stability
- the political system
- competition laws
- regulation of monopolies
- tax policies
- price regulations
- financial regulations
- regulation of export
- regulation of import
- consumer protection
- protection of markets
- other special regulations of products
- trade unions
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What can the firm use and do to determine the impact of these factors?
- using predictions (for example for technology or economy /like weather forecasts/)
- group analysis (of the consumers)
- press analysis (to strain off some important social trends)
- analysing trends (like how will the number of consumers change)
- analysing the lifestyle of consumers (like what they prefer or how they react to something)
- analysing the resources of the company itself (what will and can the company do)
- determining the capabilities of the firm (how can the company achieve further success)
- using the results of the SWOT analysis (micro-economical impacts)
- analysing the competitors (what will they do)
- create scenarios to predict the possible impact of these factors (how can the company react to something)
- analysing the economical regulations (of the country where the firm is located)
- creating surveys and analyse the answers given to them (asking the consumers themselves)
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© Copyright 2012-2014, Zsofia Koszegi-Nagy (zsobig)
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Comments on the topic
Farhan ahmadf on May 19, 2014:
Its nic i learn a lot of things here
Afzaal Hussain on May 14, 2014:
good sir i absolutely like it
Frank Slovenec from San Francisco, CA on August 07, 2013:
Well done this is a Bookmark article for reference. When I consult in the sales organizations of my customers this will come in very handy as a reminder of the market forces and internal forces that may impact the success of the company. thanks
Vasudevan on February 19, 2013:
Really good material - easy to capture the essence of it. Please do add some comments on the advantage and disadvantage of doing STEEP.
Sasha Kim on August 13, 2012:
This sort of thing is usually way over my head but you've done a wonderful job making it easy to understand! Thank you! Voted up and interesting!!
Sophie (author) from United Kingdom on August 13, 2012:
Thank you for your nice comment Karine!
thanks for the tip, you were right, it is much better already this way! :)
Best wishes and thanks again a lot!
Karine Gordineer from Upstate New York on August 13, 2012:
Hi Zsofi...Great Hub! I'm glad you included the Ecological Factors as more and more companies ARE factoring this in. One thing to note is companies are also beginning to ask themselves, "If we had to pay to replace this resource what would the cost be?". I loved seeing that in your model. I thought the Hub was a great overview and the drawing was great. One thing, if you can make the STEEP Analysis Flowchart larger I think that would help readability but other than that it was great!