PEST Analysis of Nokia

Nokia Corporation engages in the manufacture of mobile devices and mobile network equipment, as well as in the provision of related solutions and services worldwide. The company has four main business functions or segments: Mobile Phones, Multimedia, Enterprise Solutions, and Networks. The Mobile Phones segment provides various mobile voice and data devices. This segment offers mobile phones and devices based on GSM/EDGE, 3G/WCDMA, and CDMA cellular technologies.

PEST Analysis of Nokia

PEST analysis identifies the political, economic, social, technological, environmental, and legal factors that of which directly affect a company.

Political Factors

Political/Legal environment are usually considered as one because they are enforced by the nation’s government. It is vital for Nokia’s operation because different nations with their respective government have different Political/Legal platforms respectively; Nokia operating on global level must abide to ground rules and regulation in different markets of host countries around the world. To its success, Nokia surveys its scope of limits in order to isolate prohibited actions, regulations and aid from the government so as to withstand the international trade. Quotas (limit to goods imported), embargoes (restrictions), tariff and tax charges, subsidies and patents over certain technology or equipment are decided by the government so Nokia works hand-to-hand with authorities to gain maximum advantage to the Nation’s target market. Laws of copyright and abuse of phone usage keeps Nokia ahead, it limits any space of intrusion or misuse of their products.

As markets are deregulated, both operators and manufacturers are free to act independently of government intervention. In Countries like India and China where Partial regulations exist, government intervention does take place.

Economic Factors

Economy in tells the production and consumption of goods and services. As far as Nokia is concerned, the economic system is critical as it can control what the organization is to produce, how it should produce and the category of recipient who should use their end products.

On one hand, aspects of international trade is important for Nokia being the global supplier of mobile phones and on the other hand, the knowledge concerning the nation’s economic status (Type of economic system practiced, Inflation rate, level of employment and exchange rate) is equally as important to realize future plans for personal and financial safety together with enhancing entrepreneurship.

With incomes rising, people have more disposable income, which enables consumers to be more selective with their choice of mobile phone, looking to other factors rather than fulfilling the most basic of user needs (text messaging and phone calls) and price being such a key factor.

Social Factors

Socio-culture focuses on how Nokia blends in with components in a society; that is culture, social class, lifestyle and demographic and psychological factors making up the society. Nokia operates in a diverse number of culture and all levels of social class simply because different models are frequently released to satisfy all individuals despite their difference in race, nationality, religion, income level or beliefs among each other. Mobile phones can easily adapt to any culture and can be used to support different aspects and existing patterns of Individual’s lifestyle or behavior.

The rise of the so-called information society has made telecommunications increasingly more important to consumers, both in terms of work and leisure. Users are more aware of mobile phone handset choice and advancements due to increased information availability.

Technological Factors

Technology change defines how fast technology advances. Being the predominate medium by which we get things done; technology as a process, in terms of mobile phones defines the way we make contact. Not only does it helps shape culture but also changes other aspects within and/or outside the organization for example the need to upgrade Equipments to en-better the manufacturing of the end products. The success of Nokia is based on constant innovation on human technology. By enhancing communication and exploring new ways to exchange information, connecting people, Nokia allow users to get more out of life.

About Abey Francis

Abey Francis is the founder of MBAKnol - A Blog about Management Theories and Practices - and he's always happy to share his passion for innovative management practices. You can found him on Google+ and Facebook. If you’d like to reach him, send him an email to: [email protected]
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