How has the environment favored the development of Nokia?

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Assignment 1        

Chapter case: Nokia


Kennari: Einar Svansson

Case questions 3.1

How has the environment favored the development of Nokia?

We use the PESTEL factors to assist us in identifying and arranging the environmental influences on Nokia’s evolution & development. To ease the reading of this list it will be sorted according to the PESTEL model.


olitical influences on both Nokia, and the sector in which it operates have been significant. A few years ago when mobile technology had not yet reached the broad distribution that we are familiar with today, Nokia’s two competitors had a considerable advantage over Nokia in both brand recognition and market share. With a growing number of electronics emitting electromagnetic signals, the EU decided to standardize the GSM system as a general cell phone standard. This event evened the competition out for Nokia, since its competitors had to start over. In addition to this, the Finnish government had taken a leading role in creating a suitable legal environment for telecommunication companies.


conomic influences on the sector of mobile telecommunications have been immense. Purchasing power has increased very rapidly for the last thirty or so years, making it possible for the general public to indulge themselves in luxury electronics such as cell phones with built in cameras, MP3 players & more. Direct economic influences on Nokia (opposed to the sector as a whole) have however not been a big factor.


ocio-cultural influences are a limited factor on Nokia’s stable market in Europe & northern America. However new markets are emerging in the east. If Nokia is going to conquer new markets in China, India & the Middle east, they have to consider different cultures.


echnological development has obviously a large impact on a company such as Nokia. The swiftly increasing demand for smaller & better equipped cell phones defines the environment Nokia works in. The continuous change Nokia’s product selection is caused by rapid technological advances, where development in things even unrelated to telecommunications, such as a new, smaller & more photo reactive digital photography chip can force the company to develop a new phone model.

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nvironmental issues have not been a big concern for Nokia. However the battery, an important component in cell phones, is a dangerous polluter. The main reason for this short of interest from environment activists is that electricity represents an independence from a more polluting energy industry (coals, fossil fuels etc.). In the future this could in fact become a big concern. In a response to this Nokia has taken steps such as enforcing environmental guidelines upon its suppliers.


egal systems matter to all companies, but sometimes go unnoticed as an influence on business. Nokia has favored ...

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