What is the STEEP analysis?
A STEEP analysis is a tool to evaluate various external factors impacting a business or organization. Every business needs to consider a range of external forces in order to take decisions. For many people imagination is very limited and is coloured solely by their own experience and personal beliefs. This can lead to wish fulfilment or a refusal to see reality or recognise the critical changes that are happening in the world around them. In the business world pressure is often applied to take decisions quickly, acting on judgement and instinct rather than careful analysis.


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STEEP is an acronym for Social, Technological, Economic, Environmental and Political.

Social factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers).

Technological factors include technological aspects such as R&D (Research and Development) activity, automation , technology incentives and the rate of change in technology. They can determine barriers of entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation.

Environmental factors include ecological and environmental aspects such as weather, climate, and climate change which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy.

Political factors are how and to what degree a government intervenes in the economy, this include areas such as tax policy, labour law, environmental law, trade restrictions, tarrifs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided and those that the government does not want to be provided, also governments have great influence on the health, education, and infrastructure of a nation.

Trends and Events

Trend is a series of event, according to William (2007) Trend is any form of behavior that develops among a large population and is collectively followed with enthusiasm for some period

Events are observable occurrence, a good example is the PC Fait which normally is done in different parts of Malaysia in a time of 3 or 4 months in a year

Kai Lit (2011) suggested that for Malaysia the trends are
. Later marriages and smaller families
. More spending per child
. Working women and childcare issues
. More divorces
. Rural to urban migration and growth of cities
. More Malaysians living and working overseas: Brain Drain
. Illegal immigration
. Better health
. Ageing of the population
. Change in disease patterns to more chronic diseases
. Challenge of paying for healthcare for the aged
. More demand for services for the aged

Categorization of Trends can be done in the following manner
Socially: aging populations, urbanization, mixed families, increased prevalence of diabetes, hypertension

Technology: increased distribution of GPS, IPv6 networking, decreasing price and increase application of robotics in the home, genomic medicine, electric automobiles, nanotechnology

Economically: Real estate occupancy rates, unemployment rates, sovereign debt, household debt, corporate debt, government intervention in markets, corporate merger and acquisition activity, energy factors, raw material availability

Ecologically (Environment): Water availability, biodiversity, soil health, wetlands integrity, climate change

Politically: Legislation, regulation, political parties, authoritarianism versus liberal democracy





Table 1: STEEP analysis of factors affecting healthcare industry
Trends and drivers
Summary
Sociological drivers
People are attracted to scientific research due to a highly congenial work setting and the fact that it is knowledge driven and innovative.

Part-time employment, sabbaticals and other forms of flexible working attract highly qualified people and make the sector attractive to women.
Technological drivers
Healthcare technology is the most recent of the technologies that are changing our world.

The industry is about to reach a critical mass for economic take-off and for the convergence of different research strands.
Economic drivers
Globalisation is breaking down barriers to entry in healthcare, challenging companies in knowledge-intensive segments of the market.

A more unified approach is needed in relation to the ethical issues, particularly in the area of stem cell research and therapy, if the biomedical healthcare industry is to live up to its potential for growth in Europe.
Environmental drivers
In Malaysia the is a review for the raise in lowest income rate, this will drive more people to have enough income for medical insurance.
Political drivers
Lately in Malaysia there has been an opportunity for external investor to invest in the country, this will bring efficiency in health services due to competition