Discuss about the Pest analysis of Nokia Company.
Nokia is a Finland based company which was one of the leading brand in the global market (Nokia 2018). The company was unable to adapt itself with the change that existed in the market. The introduction of the smartphones was the noticeable change but Nokia failed to flourish in the field of innovation. The biggest competitor of Nokia was Samsung and Apple.
The Political factors:
The company is based in the European nation of Finland. The government of Finland hardly supported the company. It has refused to give the company the bailout and it did not receive any special favours from the government. This factor forced the company to form an alliance with Microsoft that turned out to be an unsuccessful idea. The other competitors of Nokia receives huge support from the government whereas Nokia has received minimum support from the government. The possible threat of this is that the production of the company might move from that particular region to other regions at higher cost (Borhanuddin and Iqbal 2016).
The economic factors:
The company suffered from a huge economic crisis. The competitors of Nokia has the opportunity to explore the vast economic resources and Nokia lacks the same. It suffered from a huge loss and this is the reason they are unable to develop the advanced designs and models. The reason for this, is Nokia does not have the money to finance extensive research and developments efforts that their competitors have (Fakhrutdinova et al. 2015).
The social and the cultural factors:
The launch of the smartphones and the wide acceptability as well as the demand of the same among the common people has been the biggest cultural drawback of the company. The people has favoured the android set because of the multiple function it offers. Many applications like whatsapp and the similar ones are designed for the sets that have Google Android. Nokia merged with Microsoft to launch the windows phone, which was nit a successful idea as people preferred Android over windows phone. The appeal of Nokia became limited to the customers. The association of Apple with the smartphones in some countries such as the United States has cut deeply into the market of Nokia by creating a generation of customers that only buy one brand. The leading concept in the market was the concept of Android and iOS. This stopped many customers from even considering the Nokia products (Borhanuddin and Iqbal 2016).
The technological factors:
The open sourced operating system turned out to be a developed factor. The apps changed the scenario of the mobile market. The customers looked only for phones but they looked for those handsets that could serve the purpose of a computer. Apart from communication the smartphones now turned into an effective means of handheld computers. The customers looked for those phones through which one can click good pictures, can manage the emails, can do video chatting and perform official functions. Nokia was unable to adapt with the technological changes and this is the reason they had to diminish from the market (Vuori and Huy 2016).
The legal factors:
The legal environment of Nokia is extremely challenging. It operates within the European Union and this is the reason it is challenging. European Union against Google could lead to the radical changes in the Nokia’s market for example, Android being spun off into a separate company (Vinod and George 2016).
All the electronic manufacturing company have to maintain the environmental factor. They should be environmentally friendly and they should be treated in such a way so that it can be reused and recycled. This is the reason like any other company Nokia is faced with the problem of safety and economically disposing of the used products in an environmental-friendly manner. The company in such situation would require to invest in the laws of making electronic manufacturers that is responsible for the disposable or the recycling of the used devices. In case the devices lithium batteries, it becomes a costly affair. The rate of materials and components have increased which is an environmental concern factor that the company has to consider. The climate change caused due to the global warming could be another effecting factor of the company. It could affect the production cost of the company (Singhal 2015)
Borhanuddin, B. and Iqbal, A., 2016. Nokia: An Historical Case Study. Electronic Journal of Computer Science and Information Technology: eJCIST, 6(1).
Fakhrutdinova, E.V., Fakhrutdinov, R.M., Kolesnikova, J.S. and Yurieva, O., 2015. New Start of Nokia. Mediterranean Journal of Social Sciences, 6(1 S3), p.61.
Nokia. (2018). Nokia Corporation. [online] Available at: https://www.nokia.com/ [Accessed 10 May 2018].
Singhal, N., 2015. Nokia Ltd: Travails of a Market Leader. Vision, 19(3), p.286.
Vinod, M.R. and George, M.E., 2016. The Effect of Working Capital Management in the Liquidity of Nokia Corporation: A Study with Special Reference to the Period 2012-2015. International Journal of Engineering Science, 5275.
Vuori, T.O. and Huy, Q.N., 2016. Distributed attention and shared emotions in the innovation process: How Nokia lost the smartphone battle. Administrative Science Quarterly, 61(1), pp.9-51.