Pros and cons of STEP analysis
Posted: Sun Feb 02, 2025 6:05 am
The correct use of STEP analysis is important. It allows for a systematic approach to be used when developing a scheme for interaction with the organization's environment, helps to identify internal reserves and reduce risks for business, taking into account the external environment.
A complete picture of the surrounding conditions contributes to the growth of competitiveness and allows for the implementation of measures to reduce external negative impacts on business. The method helps to identify the main risks caused by the external environment. Therefore, it is often used and is very popular among market relations analysts.
STEP analysis is a means of developing long-term strategies, since it does not take into account the internal corporate components of the organization. The company is considered as a single whole. This approach does not allow the method to be used to develop short-term plans that do not have strategic significance.
Nuances of developing a holding development strategy
STEP analysis provides a basis for further employee development:
The manager and his subordinates malta email list do not simply analyze the impact of external factors, they take into account the dynamics of their mutual influence.
To speed up the response to market changes and make adjustments to the strategy of behavior in it, the company creates a culture of interaction with the external environment.
After conducting a STEP analysis, employees develop a systemic perception of the company's environment.
During the STEP analysis process, a single list of concepts and categories is created in the company, which is used to assess the impact of external influences.
The main advantage of STEP analysis is the development of the skill of considering and taking into account, first of all, the conditions of the environment, without focusing on the internal problems of the organization.
STEP analysis can be applied in the manufacturing sector. This method of analysis can be used both in developing a business plan for a cotton gin plant and a metallurgical plant.
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Disadvantages of STEP analysis
STEP analysis has limitations in application and disadvantages. This method is not the only one, and it should be used in combination with other marketing research methods, such as SWOT analysis.
When selecting factors and dividing them into groups, one should rely not on one's own experience, but on an objective assessment of the impact of these conditions on the company. When making such a decision, there is a high probability of error. As a result, the researcher may not obtain the required data, since the STEP analysis was applied incorrectly.
A significant limitation of the application of STEP analysis is that for different areas and spheres of activity within one company the set of factors will be different. Therefore, it will not be possible to use previously conducted marketing research for your company even in the same spheres of activity.
STEP analysis is carried out from the beginning and again each time, a new matrix is created. The same approach should be used when dividing the types of activities within the company.
For example, if a company has established production of various product groups with different consumer characteristics, then STEP analysis is carried out for each group.
The stated limitations describe the conditions in which the use of STEP analysis will be most effective and will allow for the competent development of a long-term strategy for the company's development. The basis for the successful use of STEP analysis is a special approach and consideration of all areas of the enterprise's work.
A complete picture of the surrounding conditions contributes to the growth of competitiveness and allows for the implementation of measures to reduce external negative impacts on business. The method helps to identify the main risks caused by the external environment. Therefore, it is often used and is very popular among market relations analysts.
STEP analysis is a means of developing long-term strategies, since it does not take into account the internal corporate components of the organization. The company is considered as a single whole. This approach does not allow the method to be used to develop short-term plans that do not have strategic significance.
Nuances of developing a holding development strategy
STEP analysis provides a basis for further employee development:
The manager and his subordinates malta email list do not simply analyze the impact of external factors, they take into account the dynamics of their mutual influence.
To speed up the response to market changes and make adjustments to the strategy of behavior in it, the company creates a culture of interaction with the external environment.
After conducting a STEP analysis, employees develop a systemic perception of the company's environment.
During the STEP analysis process, a single list of concepts and categories is created in the company, which is used to assess the impact of external influences.
The main advantage of STEP analysis is the development of the skill of considering and taking into account, first of all, the conditions of the environment, without focusing on the internal problems of the organization.
STEP analysis can be applied in the manufacturing sector. This method of analysis can be used both in developing a business plan for a cotton gin plant and a metallurgical plant.
Read also!
"Sample proposal for cooperation: just follow the instructions!"
Read more
Disadvantages of STEP analysis
STEP analysis has limitations in application and disadvantages. This method is not the only one, and it should be used in combination with other marketing research methods, such as SWOT analysis.
When selecting factors and dividing them into groups, one should rely not on one's own experience, but on an objective assessment of the impact of these conditions on the company. When making such a decision, there is a high probability of error. As a result, the researcher may not obtain the required data, since the STEP analysis was applied incorrectly.
A significant limitation of the application of STEP analysis is that for different areas and spheres of activity within one company the set of factors will be different. Therefore, it will not be possible to use previously conducted marketing research for your company even in the same spheres of activity.
STEP analysis is carried out from the beginning and again each time, a new matrix is created. The same approach should be used when dividing the types of activities within the company.
For example, if a company has established production of various product groups with different consumer characteristics, then STEP analysis is carried out for each group.
The stated limitations describe the conditions in which the use of STEP analysis will be most effective and will allow for the competent development of a long-term strategy for the company's development. The basis for the successful use of STEP analysis is a special approach and consideration of all areas of the enterprise's work.