SLEPT Analysis: Example, Overview

Lesson Transcript
Instructor: DOUGLAS HAWKS

Douglas has two master's degrees (MPA & MBA) and a PhD in Higher Education Administration.

Managers need to constantly watch their external environment if they want to remain competitive and successful. In this lesson you'll learn about a popular tool managers can use to better understand their external environment - the SLEPT analysis. Updated: 06/28/2021

Definition of SLEPT

When identifying and assessing characteristics of a business environment, there is always an acronym managers can use to help organize their thoughts and ensure they conduct a complete analysis. One such acronym that is especially popular in the United States and England is SLEPT.

SLEPT stands for social, legal, environmental, political, and technological. Each of these categories includes important external factors that will impact the strategic direction of a company. To make it easier to understand a SLEPT analysis, we'll use the example of how an online bookstore may use a SLEPT analysis to understand their external environment.

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  • 0:04 Definition of SLEPT
  • 0:46 SLEPT Category Explanations
  • 2:49 Lesson Summary
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SLEPT: Category Explanations

Social factors are those related to the population or market served by the organization. There are broad social factors, such as the aging of the U.S. population, and there can also be local or regional social trends, like fashion fads. An astute manager at our online bookstore might want to consider how an aging population might impact the business, as well as genres, lengths, and types of books that different market segments are reading.

Legal factors include those things that are regulatory in nature. An online bookstore is going to be very sensitive to specific legal factors, such as copyright issues and discussions on an internet tax, as well as the legal issues all businesses must deal with.

Environmental factors are those related to the physical environment. Managers at an online bookstore may closely follow green initiatives related to packaging materials. Since physical books are still very popular and haven't been completely overtaken by eBooks, printing and distribution processes will still be impacted by environmental trends.

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