Proper analysis of all business aspects offers top managers and business owners valuable insight into the company’s position in various environments, its strengths and weaknesses, as well as help in decision-making and strategic planning. Analyzing company performance can be a daunting task, as analysis is not just about locating strengths and weaknesses, but also assessing the company’s posture and position relative to different factors and indifferent external environments. . The problem is that there are certain factors that influence business performance that do not depend on the company itself. On the contrary, it is the company that must adapt to the peculiarities of the external environments in which it operates. Therefore, the company cannot change the environment, but must change itself to be successful. This is where various types of analysis help. SLEPT analysis is one of them. It is widely used in various industries and businesses. This article will give you a brief overview of the SLEPT components.
SLEPT is short for social, legal, economic, political and technological factors. The creators of the SLEPT analysis claim that these factors cover the most important problems in the external environment of any company.
The social factor analyzes the position of the company in society and the attitude towards social problems. Business gets social these days. Business owners understood that businesses are a part of society and therefore, in order to meet the high demands and needs of customers, it is important to be aware of all the social trends that determine customer behavior.
The legal factor covers all legislative issues. It does not matter in which country the companies are registered, it is operating in a certain legislative field, which means that it has to comply with the rules of the applicable legislation. The legal factor analysis evaluates the company’s approach to solving legal problems, as well as possible changes within the company for better compliance with the laws.
The economic factor is considered the most important since above all companies operate in a certain economic environment. If the country’s national economy is weak, companies cannot expect positive financial results, since customers and partner companies will not have money to buy products and services. The purchasing power of customers, as well as the availability of cheap loans, are one of the most important indicators in relation to the national economy. There are other indicators that are equally important, such as the inflation rate, the national debt, the gross domestic product, etc.
It is often said that the political factor is the least important. However, experience shows that political decisions and declarations very often have a strong impact on the national economy, the investment climate and the business environment. That is why many companies seek the services of experienced political analysts who make forecasts about the possible consequences of certain political events.
Finally, the importance of technology in the development of a business should be emphasized. No one will doubt the fact that business has acquired a modern form only due to technological progress. All smart business owners and top managers now understand that without effective use of the latest technology, the company is doomed to fail.