Transcript Unit 1.5 – External Environment

IB Business Management

Prepare a STEEPLE analysis of an organization

Explain the consequences of a change in any of the
STEEPLE factors for a business’s objectives and
strategy




All businesses operate in an “environment”
Environment in business refers to conditions
“external” to the business.
External environment is complicated
What happens in the external environment is
beyond the control of the business

Older Versions
◦ PEST – Political, economic, social, technological
◦ PESTLE - Political, economic, social, technological, Legal
and Ecological

STEEPLE – Social, Technological, Economic,
Ecological, Political, Legal and Ethical
Political
Ethical
Legal
Economic
Technological
Ecological
The
Business
Social




If something changes, will impact the business
A STEEPLE analysis allows the business to
consider influences of each element on the
business
Most important influences determined
Then a strategy can be developed to deal with
changes.
Social
Lifestyles; Social mobility; Demographics, Education,
Fashions or tastes
Technological
New technology; improved technology, infrastructure;
Research & Development Costs
Economic
Economic or business cycle, rate of economic growth, rate of
inflation, rate of unemployment, interest rates, exchange
rates
Ethical
Corruption, transparency, codes of behavior, fair trade
Political
Political stability, trade policies, regional policies, lobbying
Legal
Regulations, Health & Safety legislation, Employment laws,
competition laws
Ecological
Depletion of renewable resources, organic farming, global
warming, carbon footprints

ToK Discussion
◦ To what degree are businesses limited in how much they
can “know” about the external environment


Look at STEEPLE analysis for Cat’s Store – p. 63
Student Workpoint 1.8
◦ Choose a type of business (some located on page 63);
prepare a STEEPLE analysis.

Practice Question – page 64 – China!!


Must be flexible
Must be willing to change and adapt
◦ Being an Early Adaptor
◦ Having First Mover Advantage

A business must always be monitoring the
external environment in order to change when
needed.