STEEPLE ANALYSIS (External Forces Analysis)

SOCIO-CULTURAL - SOCIAL FORCES: influence our attitudes, interests, opinions, moreover create our
behavior and ultimately what we purchase. Trends’ changes have correspondingly direct impact on
enterprises.

These factors contain: Structure of population, falling rates, competition, increase of global population,
traditions, level of education, cultural diversity and standards, social classes and their influence on the
society, average disposable income level, wealth of people, economic inequalities, level of education,
access to education (free, paid), level and access to health-care, health consciousness in society
(smoking, drinking, drug use, safe driving, etc.), buying habits and consumer preferences, average
retirement age (for men and women), personality of average consumer, reputation of company in
society, conflicts within society, susceptibility to influence, social organization (communities, social
groups, gangs, ad-hoc gatherings, etc.), uncertainty avoidance dominating in society (or other G.
Hofstede socio-cultural factors).

TECHNOLOGICAL FACTORS - technological advances have greatly changed the manner in which
businesses operate. Nowadays technological progress created a society which expects instant results.

Examples are: new technologies, absorptive capacity for innovation, globalization. New technologies
shorten Product life cycle and increase demand for new products. This revolution has increased the rate
at which information is exchanged between stakeholders. A faster exchange of information can benefit
companies as they are able to react quickly to changes.
rapid development of fact communication networks, growing efficiency of computer systems (processor
speed, database and memory capacity), global reach of information about company and competitors,
new web 2.0 (and newer) technology supports dynamic communication with customers, new IT security
challenges (encryption, certificates, SSL, HTTPS, etc.), Internet infrastructure (fibre optics, Internet
speed, availability, mobile capabilities), Internet banking and shopping, distribution of non material
goods over Internet, social media influence on marketing, SEO (search engine optimization activities),
capabilities of CRM systems, information system security (ie. based on ISO 27001).

ECONOMIC - national interest rates and fiscal policy is set around economic conditions, besides has
influence on purchasing power of consumers and structure of their expenditure.

These factors include: gross domestic product (GDP) creating by demand, stock quote, currency rate
fluctuations, rate of inflations, market substitutive and complementary, tax policy, price changes,
revenues, savings and level of unemployment, unemployment rate and trends in overall employment
level (high unemployment means less people with buying potential), number of jobs created in the
market, competition in job market (necessity to pay higher wages), high priced jobs/ low priced jobs,
overall labor costs, number of highly skilled specialists, number of employees seeking jobs, number of
people near the retirement age,
level of income in population (income per capita), differences in income, level of economic inequality,
risk of lay-offs, strength of trade unions, additional burdens on salary, social and health insurance rates,

ENVIRONMENTAL - environmental protection legislation, pollution, waste management and disposal,

clean air and water, energy saving technologies, attitudes towards ecology in society.
 STEEPLE ANALYSIS (External Forces Analysis)

More Examples: government policy and policymaker engagement in environmental protection, fees and
fines for using natural environment, regulations of waste disposal, recycling and storing, regulations of
carbon CO2 and toxic fumes emission, relative “value of nature” in political campaigns, increasingly
stringent environmental regulations on regional, state and international levels, cost of non-compliance
with ecological regulations, incentives for businesses and customers for using clean products and
services, activities of government agencies tracking business activities, giving permits setting minimal
standards for any air emissions, procedures for handling waste and hazardous materials, etc.
requirements for implementing environmental standards e.g. ISO 14000,

POLITICAL - factors could create plenty of advantages and opportunities for organizations.

These factors include: political situation, political stability, state interference, market regulations, trade
agreements, tariffs or restrictions, taxes, lobbying and clarity of law, level of bureaucracy (procedures,
permits, etc.), level of corruption (tradition of bribing government officials), government stability and
probability of changes of political systems, form of government: totalitarianism/autocracy/democracy or
other type of political system, cyclical nature of democratic countries (elections can change politics from
time to time), power structure, regional government powers, private or government owned companies
dominate on the market, presence of state monopolies, government interfere (or not) with business,
existence of pressure groups influencing government (farmers, miners, etc.), activities of lobbyists,
safety and security, public protection, military, level of government spending.

LEGAL - (subset of above mentioned political factors) involve all regulatory and law determinants that
can negatively or positively affect results of market actions and decisions of management of company
functioning in particular country. International companies must analyze and identify those factors (legal
environment) independently for every state they function.

Examples list: country tax code (may be different in every country served by business), tax restrictions
for particular types of business, export and import restrictions, tax relief for some types of products or
businesses promoting development, taxes and customs imposed on consumed goods may influence
demand, individual income tax, corporate income tax, overall tax and fiscal policy (excise duties).

ETHICAL FACTORS - involve duties, morality, integrity, behaviour, what is good and bad for company,
employees and society as a whole.

Further more: eliminating unsafe working conditions, avoiding processes and technologies that
jeopardize the safety of the employees and public, producing product safe for customers, waste product
utilization and recycling, profiting from products bad for health (drugs, cigarettes, alcohol) and people
(gambling), industry specific regulations (marketing code, broadcasting code), regulations on
discrimination in hiring and promoting.