Nokia Case Study

Table of Contents page

Nokia 3

PESTLE analysis 4

SWOT analysis 7

How Nokia's business is affected by the market mechanism of supply and demand.

Demand and Supply theory 8

Price elasticity of demand 8

Conclusion 9

References 9

Figure 1: Nokia

Nokia

Nokia, heretofore the world's largest maker of mobile phones has more than 13 thousand employees in more than 120 countries, with sales in more over 150 countries. The company has global annual revenue of over £31 billion, with operating loss of £0.83 billion, period.

In 2011, it was the largest manufacturer of mobile phones with 23% of global device market share in the second quarter. The company also produces mobile devices for every major market segment and protocol, which includes GSM, CDMA, and W-CDMA (UMTS) and offers applications, games, music and internet through its Ovi platform.

Nokia also provides free digital map information and navigation services through its owned subsidiary Navteq.

In February 2012 Nokia announced that it was moving smartphone assembly from Finland, Hungary and Mexico to existing facilities in China and South Korea, which would result in cutting 4,000 factory jobs.

As Nokia chief executive Stephen Elop likened Nokia's situation to standing on a "burning platform".

"Stephen Elop describes the company as standing on a "burning platform" surrounded by innovative competitors who are grabbing its market share."(BBC 2011)

On Nokia's failure to keep up with the competitors:

"While competitors poured flames on our market share, what happened at Nokia? We fell behind, we missed big trends, and we lost time." (Cellan-jones 2011)

Nokia announced a partnership with Microsoft in February 2011; stating that all Nokia smartphones introduced since then were to run under Microsoft's Windows Phone (WP) operating system

The company's first Windows Phone handsets were WP7.5 Lumia 710 and 800 unveiled in October 2011.

"Mr Elop said the "Lumia is the first real Windows phone" and predicted the company would be the leader in "smartphone design and craftsmanship"."(Weber 2011)

PESTLE Analysis

The following are the analysis to understand the macro-economic factors that might affect Nokia.

Political

Nokia has its headquarters in Finland and because it is a Finnish company, the board of directors has to be run in accordance with The Finnish law. Since it is also an international company, Nokia has to comply with international laws such as the European law and it also has to comply with every foreign country's domestic laws, which it is doing business with. Laws affect every aspect of Nokia's business; product safety, consumer protection, competition, packaging and labelling and advertising, just to mention a few.

Tax treaties, patent protection systems and trademark conventions are all collection of examples of treaties, conventions and agreements between nations in international law.

Economic

Economy in tells the production and consumption of goods and services. The economic system affecting Nokia 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.

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

Due to the rise in incomes, people have more disposable income, enabling 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. Growing economy in European market leads to the increasing income of the people. whereas, if the economy is decreased, consumers will be spending less money on mobile phone, which is a negative result for Nokia, e.g. weak global economy in 2009.

Social

Nokia operates in a various number of culture and at many levels of social class because it has different models which are released frequently to satisfy all individuals despite their difference in nationality, race, 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 behaviour. Users are more aware of mobile phone handset choice and advancements due to the availability of increased information.

Technological

Technology is perhaps the most important