Why is it needed? STEP analysis is necessary to assess the external environment in which a business operates. It can be used to determine how the political, economic, social and technological environment affects the company's activities.
What's the catch? This analysis tool is quite popular, but it is not suitable for every enterprise. Also, problems with the assessment of one or another factor often arise, which can distort the picture and reduce the effectiveness of the methodology.
The article explains:
The essence of STEP analysis
Tasks of STEP analysis
Pros and cons of STEP analysis
Differences between STEP analysis and similar methods
Factors in STEP Analysis
Stages of STEP analysis
Example of STEP analysis
3 mistakes in conducting STEP analysis
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The essence of STEP analysis
STEP analysis ( from the English S – social, T – technological, E – economic, P – political) is an approach to determining social, technological, economic and political malta email list factors that have a direct or indirect impact on an organization and its work.
(Further in the text, the term SWOT analysis will be encountered. This is a method of comprehensive assessment of factors that directly and indirectly affect business. SWOT stands for: Strengths – the company’s strengths, Weaknesses – its weaknesses, Opportunities – the possibilities of the external environment, Threats – and its threats. The abbreviation PEST is the same as STEP with a different priority of current conditions, political ones are now in first place.)
SWOT assessment of the company's condition
The decision to identify four main groups of factors as the most significant is due to the fact that:
Politics has a direct impact on the conditions in which an organization operates.
The distribution of available resources on a national scale depends on the level of economic development.
Buyer behavior and the reasons for this or that purchasing algorithm are determined by the social environment of society.
The resulting market changes in working conditions and production of products depend on the level of technological development.
The STEP analysis matrix is a table containing the following columns: the name of the group of material circumstances, each of which formulates the factors themselves, describes their manifestations and probable actions of the company, and the direction of minimizing losses in the event of a negative effect of the specified reasons. All factors are assessed using a point system, which reflects the degree of significance of each for a given company.
For different companies, each group of factors has its own significance. For example, for one company, the social group is more important, and for another, the political one. Therefore, this type of analysis is called differently: STEP and PEST, respectively, in which one or the other factor is a priority.
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