Pest Analysis On Nokia -
December 2nd, 2010
Nokia Corporation (Finnish pronunciation: [ˈnɔkiɑ]) (OMX: NOK1V, NYSE: NOK, FWB: NOA3) is a Finnish multinational communications corporation that is headquartered in Keilaniemi, Espoo, a city neighbouring Finland's capital Helsinki. Nokia is engaged in the manufacturing of mobile devices and in converging Internet and communications industries, with over 123,000 employees in 120 countries, sales in more than 150 countries and global annual revenue of EUR 41 billion and operating profit of €1.2 billion as of 2009. It is the world's largest manufacturer of mobile telephones: its global device market share was 30% in the third quarter 2010, down from an estimated 34% in the third quarter 2009 and an estimated 33% in the second quarter 2010. Nokia's estimated share of the converged mobile device market was 38% in the third quarter, compared with 41% in the second quarter 2010. Nokia produces mobile devices for every major market segment and protocol, including GSM, CDMA, and W-CDMA (UMTS). Nokia offers Internet services such as applications, games, music, maps, media and messaging through its Ovi platform. Nokia's subsidiary Nokia Siemens Networks produces telecommunications network equipment, solutions and services. Nokia is also engaged in providing free digital map information and navigation services through its wholly-owned subsidiary Navteq.
In the case of Nokia, it can be classified as international organization. It basic for global brand, which is required to focus on macro environmental factors, such as Nokia. Macro environmental factors comprise Political, Economics, Society, and Technology, viz, PEST Analysis. It is necessary force that Nokia has to concern and know what is happening in the other countries at the moment. Because there are different culture and different external factors between different countries, Nokia has to adjust its strategic plan in order to develop international market.
It is important of a company to acquire resources from government, such as economic policy, and science and technology policy. The success of Nokia has obtaine the resources from Finnish policies which assist Nokia to advance its products. As Zheng (2001) has observed:
The Finnish policies are the most important factors of Nokia. To operate efficiently, a modern knowledge- and technology-based economy that is highly specialized, internationalized and undergoing rapid structural change requires active support from the public sector. In its widest sense industrial policy and science and technology (S&T) policy comprise all those measures by which the public sector shapes the operating environment for business and thus fosters public welfare. Both policies ursued by Finnish government and Parliament are crucial for the development bothe of the Finnish Economy and of national information society.
Finnish government best facilitate the efficient functioning of the economy by directing its resources to the reduction of market failures. The state must also pursure an industrial and economic policy that provides a stable macroeconomic environment for enterprises. General macroeconomic stability, low interest rates, stable currency conditions and the international competitiveness of the tax system form the foundation for the growth of business an improvement in employment.
As the result of this, not only Finnish Government but also international companies, such as Nokia, have play very important roles to develop their information society and national technology strength.
According to the fact that Russian Federation was collapsed in early 1990s and it assaulted with Finnish economics (OECD, 1996). Nokia also face with the problem, and changed its functions from single market and overall products to global market and focusing mobile phone market.
Society and Technology
In the 1980s, people trend to microcomputers and Nokia try to match the tendency to produce its main products, such as computers, monitors and TV sets.(Merriden, 2001) According to the changes in 1990s, Nokia also changs its functions to mobile phone market. Nowadays, the global market trends to connect PC and mobile phone, even though to combine these two products together.
On the other hand, one important future challenge of Nokia is to estblished its policy to follow up the environmental policy and science and technology policy of the Finnish Government. As Zheng (2001) has report:
Substainable development and environmental protection have various effects on the operation of the innovation system. Innovation also creates new opportunities for promoting sustaainable development. The markets for environmental products are expected to grow rapidly in the near future. The Finnish government offers goods facilities for taking this opportunity. National and European reforms arising from environmental objectives influence the perequisites from innovation. [Nokia] must be used to find solution which help to implement environmental objectives as well as the objectives of innovation policy in a balanced way.(Science and Technology policy council of Finland, 1996)
To sum up, the main reason of Nokia has success to advance its products are the policies and technology development of Finnish Government. It can not be separate between Nokia’s successful of advance its product and Finnish Government’s policies, both of Nokia and Finnish Government are the winner in the international market. Nokia has obtain the success of mobile phone market, and Finnish Government has establish its position of technology development.
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