The STEEPLE analysis is a tool that companies’ management can utilize to acquire understanding of the market environment and industry conditions.
The analysis can provide management with important information of external factors when preparing the marketing strategy. Below I have provided a STEEPLE analysis for the Royal Bank of Scotland and steps that the company can take and are planning in the next 12 months to address these external factors within the banking industry.
Factors:
- Social: Changes in lifestyle due to the impact of the financial crisis. Number of educated people available within the industry. People are now living longer. Global mobility of top skilled talent.
The company is implementing a new strategy by offering products that have a lower level of risk. They are also making careful decisions regarding risks and decreasing investments in options with high-risk levels. Additionally, to retain skilled employees, the company has introduced incentives and training programs. In order to do so, top talent is being transferred to other global locations where RBS operates. Furthermore, customers now have a broader selection of pension products available to meet their various needs.
The opportunities for innovation are driven by advancements in technology, the rapid pace of technological change, and the cost of technology. RBS has embraced these opportunities by incorporating them into its long-term IT strategy, which involves investing in IT change projects and new IT systems. To reduce costs, certain IT functions have been outsourced to cheaper offshore locations such as India. Additionally, RBS has modernized its financial general ledger through the integration of best practice models into its ledger integration project and transitioning to an Oracle-based general ledger. Furthermore, the merger between ABN AMBRO and RBS has led to technology consolidation between their respective systems.
The situation has been influenced by various economic factors such as tough economic conditions, devaluation of the sterling and Euro, changes in the LIBOR interest rate, lack of market liquidity, inflation increase, and tax increases and changes. A bailout package agreement has been reached with the UK government, and measures are being taken to enforce its terms. In order to raise capital, noncore businesses are being disposed of as the focus shifts towards core business units. Furthermore, traders’ limit levels have been adjusted and stricter control is being implemented on investment banking businesses through consolidation.
Risk management has been planned to be intensified for hedging. Transfer pricing policies have been updated in order to ensure that income is lawfully earned in jurisdictions, resulting in tax savings. Certain operations have been moved to less expensive locations. Additionally, there are concerns regarding increased energy costs and environmental policies. With that in mind, plans are in place to implement improved energy-saving lighting and switch printers to double-sided printing to reduce paper usage.
Efforts to increase electronic filing have been implemented to reduce paper usage. This initiative involves participation from various political entities such as the government, government policies and legislation, regulators like the FSA, and political stability. Furthermore, a collaboration has been established between the government and RBS, with the government being the majority shareholder. The directors of RBS have developed new policies and performance triggers, while also enhancing the skills within the regulatory department of the bank.
* The CEO Stephen Hester has increased PR activities to enhance RBS’s reputation and stability in the UK.
* There is a potential risk of legal action from employees, suppliers, and previous business partners.
* To ensure proper and efficient management of relationships, a clear communication policy has been implemented with business partners, employees, and suppliers.
* Legal counsel has been hired to provide guidance on legal matters.
Ethical and unethical business practices may be adopted by RBS. Policies and procedures within the company have been structured to ensure that business is conducted ethically.
