STEP analysis and its importance in the development of the company

The results of the study are recorded in the form of a matrix, where each factor is assigned a certain rank based on expert evaluation of its significance.
There are also modernized versions of the STEP analysis. For example, legal and environmental factors are included in the PESTLE analysis. When SLEPT analysis takes into account the legal aspect. With STEEPLE analysis, environmental, legal and ethnic factors are included in the object of study.

Political factors

Political factors can create a favorable environment for the development of the company, or, conversely, create barriers to its activities. The number of political drivers may include programs to support individual sectors of the economy. For example, in the form of targeted programs for research in the field or promotion of sales markets. The state can determine the priority sectors of economic development and establish for them tax breaks or other preferences.Also, the positive aspects include the protectionist measures of the government to support domestic producers in the form of increased import duties.
Government decisions can also become a source of political risks and create barriers to the development of a company. For example, in the form of various administrative barriers to business development, the spread of corruption, or by increasing the tax burden. Also among the political factors include elections, joining economic unions and alliances.

Economic forces

It would be incorrect to analyze the company's activities without taking into account the influence of the macroeconomic environment. Among the economic factors include such important indicators as the dynamics of GDP and inflation, the ruble exchange rate, the refinancing rate. For companies operating in consumer markets, effective demand, employment statistics and disposable income of the population are taken into account. Whereas for representatives of industrial markets, the state of industrial production, as well as the activity of the business environment, are important.
Economic trends include the overall market dynamics of the industry, as well as trends in the market for substitute goods. It takes into account the dynamics of prices for raw materials and electricity, etc. factors.

Social factors

The group of social factors includes changes in basic values, as well as in consumer preferences. These trends are determined on the basis of consumer surveys and other methods of consumer analysis. Timely identification of trends in consumer preferences allows for timely adjustment of the range.
Also to the group of social factors include demographic parameters, religious motives, the influence of the media.

Technological factors

The importance belongs to technological factors. These include trends in R & D, new patents and products. For example, some of them may be aimed at improving production technology, which will allow the company to reduce its own production costs. Particular attention should be paid to the identification of developments in the field of substitute products.

PEST analysis value

The STEP analysis allows you to create a complete picture of the external environment of the company, identify drivers and barriers to its development. Based on this, you can develop steps to improve the competitiveness of the company in the market, as well as find ways to level negative factors.STEP analysis allows you to look at the company from the side. It provides an opportunity to identify the leading risks that companies will face. This is the reason for the wide popularity of the STEP-analysis method among analysts.
STEP analysis is more suitable for strategic long-term planning, because it does not take into account the internal development environment of the company. Therefore, this method is not used for tactical planning.

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