SLEPT Analysis (Social, legal, economic, political and technical):
It is important to ‘scan’ the external environment before making business plans or when evaluating existing ones. Doing so takes the form of a SLEPT analysis and, therefore, scanning or investigating the social, legal, economic, political and technological impacts that may or may occur in a business. It is important that you are aware of the actions of your competitors in the business.
Social factors are related to behavior, taste and lifestyle patterns. An important component of this is the change in consumer behavior, which results in changes in fashion and styles. The age structure of the population also changes over time (we currently have an aging population). To better configure your business, it is better to have a good knowledge of the social factors that surround it.
Legal factors, that is, government policies related to business in particular, laws often change with each budget session and amendments and laws change from time to time, especially in a country like India. There are consumer protection laws, environmental laws, health and safety, labor laws, etc., which are constantly reviewed in many areas.
Economic factors are affected with each change in social factors. There are many ups and downs associated with the general boom and the economic slowdown. In a boom, almost all businesses benefit and the biggest losers in a recession. Other economic changes that affect the business include changes in the interest rate, the salary rate and the inflation rate (that is, the normal level of price increase). Companies will be encouraged to expand and take risks when the economic situation is correct, i.e. Low-interest rate and growing demand.
Political changes are related to changes in government influence. These changes have been particularly important in recent years because, as members of the European Union, we have to adopt the directives and standards established by the European Union that later become part of the law of the United Kingdom. Political changes are closely associated with legal changes.
Changes in technology have also become particularly important in the post-millennium world. This is particularly true in the context of modern communication technologies. The creation of databases and electronic communications has allowed to share and distribute large amounts of information in a modern company, capable of reducing large costs and, often, improving the service. Organizations must know the latest technologies relevant to their businesses and navigate the wave of change.
Also read: Types of Environment, Micro Environment, Macro Environment, Socio-Cultural Environment, Recent developments in economic environment, Environmental Analysis, ETOP (Environmental Technology Opportunities Portal)