Construction on soft natural soil is considered a risk due to its low shear strength and high compressibility. Stone columns are an effective improvement method for soft soils under light structures such as rail or road embankments. Stone columns are generally used to increase the bearing capacity which depends on their lateral support. In this research full scale stone columns in Bremerhaven clay, a soft soil layer of 6.0 m thickness, were analyzed using the finite element program Plaxis. The stone columns were loaded under undrained and drained conditions of the surrounding soft soil to investigate the effect of varying parameters like spacing distance between columns, column diameter and stiffness of the geogrid encasement on the behavior of the stone column in short and long term conditions. The results showed that the ordinary stone columns with narrower spacing distances and smaller diameters have a greater bearing capacity and show smaller settlement as well as lateral bulging than wider spacings and greater diameters of stone columns. When using geogrids as encasement for stone columns, a huge increase in the bearing capacity of the stone column as well as a huge reduction in the lateral bulging and the settlement occur. The bearing capacity of the stone columns increases as well as their lateral bulging, settlement and differential settlement decrease with increasing encasement stiffness in both short and long term conditions.