DESTEP Analysis
DESTEP Analysis: this article explains practically the DESTEP Analysis. This article contains a general
meaning of the DESTEP acronym, the 6 different elements of the model, an practical DESTEP Analysis
example and tips. After reading you will understand the basics and principles of this strategy and marketing
tool. Enjoy reading!
What is the DESTEP analysis?
Organizations depend on their external environment. This environment can be divided into the
Meso- and the Macro environment. The Macro environment is the sector or the market in which the
organization is active. An organization is somewhat capable of influencing this Meso- environment. In the
Macro environment this the other way round, it influences the organization. Every organisation is faced
with factors they can exert influence on and factors they cannot exert influence on at all.
The DESTEP Analysis provides more information about these Macro-economic factors. DESTEP is an
acronym that stands for: Demographic, Economic, Sociocultural, Technological, Ecological and Political
(elements).
The DESTEP analysis model explained
A business and marketing model has been developed from science, indicating the factors that apply
to the Macro-environment. A DESTEP Analysis clarifies how a company can best deal with such Macro-
economic factors and how to adjust their strategy accordingly.
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The analysis model is the acronym for six factors:
Demographic aspects
This factor addresses the composition of the population; greater understanding of this factor could
be of crucial importance for an organization.
Economic aspects
These are all factors that have to do with economic growth, inflation, purchasing power, etc.
Social (cultural) aspects
These are characteristics in the area of culture and way of life.
Technological aspects
This is about all developments and innovations an organization has to respond to in order to keep
up with the times.
Ecological aspects
This includes all factors in the area of the physical surroundings and the environment.
Political-legal aspects
These are all political measures at a decision-making, provincial and municipal level.
DESTEP analysis in practice with an example
Using this macro-economic factor analysis a company may derive strategic benefits from this. With
the right advance information about the different DESTEP Analysis factors, an organization can determine,
for instance, whether they should or should not open a branch in a specific environment. Below is a
DESTEP analysis example of a worldwide known coffee chain. The chosen country is the Netherlands.
Demographic aspects
Small country with high population density (16.3 million people), decreasing growth and increasing
aging.
Economic aspects
Rich economy that is attractive for investors. There is economic growth (3.5% in 2006), including
confidence among both consumers and producers. Expenditure per household is increasing.
Social (cultural) aspects
The Netherlands is the second country in the world with the most coffee drinkers. 70% of them
drink that mainly at home.
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Technological aspects
The Dutch are crazy about luxury coffee machines such as manual espresso machines.
Ecological aspects
Dutch people find coffee to be at home from other countries more important than drinking outside
the door.
Political-legal aspects
The Netherlands has a fairly stable political and legal system. In addition, it also has good relations
with other countries when it comes to import and export agreements.
conclusion
For the worldwide known coffee chain, it is not interesting to open branches in the Netherlands.
Despite the good import and export agreements and the rich economy, two-thirds of the Dutch prefer to
drink coffee at home and enjoy it more than outside the door.
Tips that can help during the conduction of a DESTEP analysis
The following tips are recommended for carrying out a DESTEP Analysis as successfully as possible:
It is important to, in addition to the DESTEP Analysis, to continuously centre on the starting position
of the organization;
DESTEP Analysis factors are to be considered from all angles, as a result of which both important
and less important matters are highlighted.
Benefits of the DESTEP analysis
The use of the DESTEP analysis has a number of advantages:
It is a simple tool that can be used by anyone
It stimulates discussions of the influence of the outside world
It emphasizes considering the demographics of a market
It provides a detailed but clear picture of the external factors that affect a company
https://www.toolshero.com/marketing/destep-analysis/
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