Nokia is a multinational consumer electronics, IT, and telecommunications company. Eduard Polon, Leo Mechelin, and Fredrik Idestam founded the tech company in 1865. The company is operating its business in approximately 130 countries across the globe. Today, we’ll discuss the PESTLE analysis of Nokia; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Nokia
Some of the main political factors in the Nokia PESTLE analysis are as follows;
I-Political Stability
Finland has a stable political environment and it falls under the category of top growing and happiest country. The stable political and economic environment plays a key role in the growth and development of the tech and IT company Nokia. However, it paves the way for the telecom brand to smoothly perform its business operations without any disruption and supply chain issues.
II-EU Regulations
The EU is introducing various new laws and regulations for tech and IT companies that will directly impact Nokia’s business operations. For instance, the EU has recently implemented the DSA (Digital Service Act), DMA (Digital Market Act), and others for telecom and IT. Compliance with new regulations has increased the regulatory cost by 1 million Euro for the tech company.
III-Trade Policies
Nokia experiences various types of trade and tariff policies and restrictions for its telecom products and equipment. For instance, the US government imposes a special tariff on the import of telecommunication products. Higher trade tariff directly impacts the retail price of the company’s telecom products. According to an estimate, the US government imposes tariffs of approximately 10 billion USD on tech and IT products.
Economic Factors Affecting Nokia
Some of the main economic factors in the Nokia PESTLE analysis are as follows;
I-Economic Downturn
The global economy is going through a rough patch for the past few years. It is due to the lower GDP rate, higher unemployment rate, and higher uncertainty due to the tight economy, and it has decreased the purchasing power of consumers. When people have limited disposable income, they won’t spend it on luxury consumer electronics products and telecom devices.
II-Currency Exchange Rate
Nokia is operating its telecom and IT business in approximately 130 countries across the globe. The telecom brand regularly deals with various types of currencies in the imports and exports of products and goods. On the other hand, the currency exchange rate market is highly volatile, a small change in the currency exchange rate of the EU and USD would directly increase the cost and expenses of the company.
III-Increasing R&D Expense
According to an estimate, Nokia invested approximately 5 billion Euros in research and development projects. The tech brand is working on the development of 5G technology, cloud technology, IT, and other tech projects. In fact, R&D investment is necessary to develop new technology and gain a competitive edge in the market.
Social Factors Impacting Nokia
Some of the main social factors in the Nokia PESTEL analysis are as follows;
I-Consumer Demand and Preferences
Consumer demands and preferences keep on changing for consumer electronics products, IT, tech, and devices. In order to keep up with consumer market trends, Nokia and other telecom brands introduced new models and innovative tech devices with unique features for the customers. Changing customer market needs and preferences compel the company to develop innovative and unique products and features.
II-Smart and Digital Devices
According to an estimate, the global market of smartphones and digital devices will reach approximately 1 trillion USD by 2030. Individual users, businesses, and companies are investing in smart and digital devices. It presents a great opportunity for Nokia to develop unique and innovative smart digital devices, tools, and equipment.
III-Health and Wellness
The consumer market has become highly cautious about their health, wellness, diet, and fitness. They are buying smart tech products that inform them about their heart rate, BP, sleeping time, walking steps, and other fitness measures. Nokia should develop health and wellness tools and equipment to keep up with the growing customer market trends.
Technological Factors Affecting Nokia
Some of the main technological factors in the Nokia PESTEL analysis are as follows;
I-5G Technology
Nokia is the world’s leading player in the 5G technology market and in the development of 5G tech infrastructure. According to an estimate, Nokia has helped and facilitated approximately 30 telecom companies in the development of 5G network services. The company’s annual revenue has increased by 7% in the telecom and network infrastructure development area.
II-IoT (internet of things)
The accumulated investment of Nokia in AI and IoT would reach approximately 1.1 trillion USD by 2026. The tech brand is offering its Nokia Wing service in approximately 20 countries; the company’s IoT connectivity business has increased by 25%.
III-Software Updates
Software and system updates play a key role in the smooth performance and building and maintaining tough security measures. Nokia sends security and system updates on approximately 95% of its tech and digital devices. According to an estimate, the tech brand invests approximately 1.5 billion Euros on the software updates and system improve areas to make its devices secure.
Legal Factors Impacting Nokia
Some of the main legal factors in the Nokia PESTEL analysis are as follows;
Regulation Compliance
Nokia needs to comply with the regulatory requirements of different countries. They comprise IPR, patents, data security and data privacy laws, labor laws, import and export laws, trade tariffs, and other legal requirements. Regulatory compliance would help the telecom brand to smoothly perform its IT and telecommunication business operations without any delays and disruption.
Environmental Factors Affecting Nokia
Some of the main environmental factors in the Nokia PESTEL analysis are as follows;
Sustainability Initiative
Nokia’s devices consume a significant amount of energy and cause electronic waste to the environment. The telecommunication brand should invest in the environmental sustainability initiative by taking steps like renewable sources of energy, biodegradable plastic, efficient devices, increasing recycling, and others.
Conclusion: Nokia PESTLE Analysis |PESTEL Analysis of Nokia |External Environmental Analysis of Nokia | Strategic Analysis of Nokia
After an in-depth study of the pestle analysis of Nokia; we have realized that Nokia is the world’s leading telecommunication and consumer electronics brand. If you are learning about the Nokia PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
