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1.5: External Environment (STEEPLE Analysis (Social (population size &…
1.5: External Environment
STEEPLE Analysis
framework for analysing external enironmental factors
S
ocial
population size & structure
lifestyle
age groups
education levels
T
echnological
state of technological advances
introduction of new technologies
E
conomic
GDP (gross domestic product) growth rate
inflation rates
interest rates
exchange rates
E
nvironmental
weather & climate
flora & fauna
environmental pressure groups activity
P
olitical
type of government
government ideology
towards free markets
imposition of tariffs
business incentives offered
stability of government
L
egal
law influencing business activity
competition law
health & safety
consumer protection
employee protection
E
thics
general code of ethics
tendency of people to be ethical
combined with SWOT analysis to assess internal factors that influence the future of the business
more effective if done regularly
Social & Cultural Influences
ageing population
adapt strategies to patterns of demand & change the age structure of workforce
improved education facilities
early retirement
rising divorce rates
job insecurity
immigration
changing patterns of employment
increase of women in employment
increase of student employment
increase of part-time job employment
Impact of Technology
the use of tools, machines & science in industry
information technology (IT)
: use of electronic tech to gather, store, process & communicate info
focus on new product development
improve stakeholder communication
development of new processes
enterprise resource planning (ERP) systems allow the review of sales, costs & other data in one software
cost benefits
shot-term high costs
long-term benefit
competitive advantage
outsourcing & offshoring
computer-aided design (CAD)
: use computers & IT to design products
computer-aided manufacturing (CAM)
: use of computers & computer controlled machienry to speed production
Economic Influences
fiscal policy
: changes in government spending levels & tax rates
four main macro-economic objectives
economic growth & rising living standard
low levels of inflation
low levels of unemployment
balance of payments between imports and exports
economic growth & recession
interest rates
exchange rates
tax changes
unemployment
inflation
demand-pull inflation
: excess demand in an economy
cost-push inflation
: rising costs force businesses to increase prices
Environmental Influences
determined by the surrounding physical environment
crucial for tourism, farming, agriculture & mineral extraction
environmental controls
waste disposal
use of sustainable energy
reducing packaging
natural disasters
natural resources
infrastructure
road & air transport
Political Influences
the nature & stability of government
who controls the government
what are the ruler´s main objectives
government policies towards business
government stability
form of political structure
trade policies
Legal Constraints
employment laws
health & safety
redundancy pay
protection from discrimination
minimun pay levels
maternity pay
consumer protection laws
inaccurate advertisement
sell of faulty goods
business competition laws
unfair competition
monopoly exploitation
political changes/new government
major policy changes
Ethical Influences
values & attitudes held by the majority of a population
child labour
corruption in business practices
advertising of products
affects reputation of the business
Cecilia Martínez, A01197738