Nokia Business Analysis Report: Microeconomic Limitations Analysis

This report provides a comprehensive business analysis of Nokia, examining its performance through external and internal audits. The external audit incorporates a PESTEL analysis, evaluating political, economic, socio-cultural, technological, legal, and environmental factors impacting Nokia's operations. The internal audit utilizes a SWOT analysis to assess Nokia's strengths, weaknesses, opportunities, and threats. The report also delves into microeconomic aspects, including supply and demand, elasticity, and oligopoly, exploring price, cross, and income elasticity. Finally, the report identifies and discusses the limitations of microeconomic principles in the context of Nokia's business environment. This analysis aims to provide a clear understanding of Nokia's market position and challenges.

Running head: NOKIA BUSINESS ANALYSIS
NOKIA BUSINESS ANALYSIS
Name of the Student
Name of the University
Author note

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Table of Contents
Introduction:....................................................................................................................................2
External audit:..................................................................................................................................2
Internal audit:..................................................................................................................................4
Micro economic:..............................................................................................................................5
Limitations of microeconomics........................................................................................................6
Conclusion........................................................................................................................................6
Bibliography.....................................................................................................................................8

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Introduction:
Nokia have been one of the blooming mobile brands in the last decade. However due to
some issues in the operational process, it could not hold on to the best level. The major issues
that have been detected was usage of poor technology in the mobile development process.
Other competing companies have been constantly improving on the technology. This report
provides a proper external audit of the organization. Discussion regarding business
environment is performed as well. In this section, PESTEL analysis is also done in a precise
manner. Proper description of the benefits that Nokia might be receiving due to performing of
the external auditing. After this section, Internal Auditing is also performed. In this section,
SWOT analysis is performed. Microeconomic aspect is also considered in this section. Supply
and Demand, elasticity as well as Oligopoly are the main aspects that are considered while
framing the report. Price elasticity, Cross elasticity as well as income elasticity have been
discussed in the report as well. The limitations that are present in the microeconomics have
been stated as well.
External audit:
Business environments:
Business environment of Nokia is mainly focussed on company’s operation, customers,
competitors, stakeholders, suppliers, regulations, stakeholders, competitors as well as the
economic factors that affect the technological development. The entire business environment is
sub divided in 2 parts, namely the micro environment and macro environment.
The aspects that are considered for Micro environment for Nokia are namely employees of the
organization. It have been seen that Nokia have been facing high competition by their
competitive brands and hence wise employees needs to be highly efficient and technically
strong so that they can stay in competition with the other brands. Customers also falls under
the base of Micro environment. It can be stated that Nokia needs to be focussed on
understanding the needs of the customers. This will ensure that the data that have been
collected by the customers must be used for performing trend analysis. After performing
proper trend analysis, better understanding of the demands of the clients can be made. Proper
alignment of the brand name with the demands that are stated by the clients will be enhancing
the business management process. Suppliers also fall under this category. It can be stated that
the supplier base that Nokia has is one of the best and the raw materials that are provided by
them are up to the mark as well. Being a big organization having proper shareholders are
important. The main reason that the shareholders are the main fund provider and decision
makers. Competitors also falls under the likes of Microenvironment. The number of brands that
acts as competitors have been ever increasing and this is where Nokia have been facing high
competition. The Macro Business environment is basically focussed on the PESTEL analysis of
the brand.
PESTEL analysis for Nokia:
Political: Nokia is based in Finland. It have been seen that their government have been
supportive in nature. Another aspect that is considered is that Finland is a member of European
Union, hence they get a lot of political interest as per the policies of the European policy
development. It have been seen that Nokia have been enjoying a low barrier in trades. Foreign

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direct investments are also received. The rule of national quota have been one of the main
concerns that benefits the success of Nokia. Hence Nokia faces less competition in Finland
itself. Nokia have been working with the government authorities which ensures that better
assessment of marketing process, it will be performed in a proper manner. Nokia had also
applied for getting the law of copyright. Due to proper bond with the government, it gets easier
for them to get these copyright.
Economic: economic system plays an important role in the operational process of
controlling of the production process. Global supplier of different aspects of international trade
have been acting different for proper proposition of the operational process. Another aspect
that is to be considered is that Nokia have been performing business in several countries and
hence wise proper understanding of the inflation rates and currency exchange rates will be
considered. Economic condition of different host countries are to be considered as well.
Understanding socio economic status of the country will ensure that better analysis of the price
segments can be decided. This analysis will help in maintaining the demands of the normal
people.
Socio-Cultural: Socio cultural activities one of the major reason Nokia have been facing
difficulties in coping up with the other brands as they have been constantly focussing on
developing platform that will be supporting apps. In the previous days Nokia was using
windows platform. However, most of the popular apps were designed in a manner that it
supports in Google Android and IOS. Hence this also affected in decrease in popularity of Nokia
against other brands.
Technological factors: The main technological problem that was faced by Nokia is that
they were lacking the speedy creativity in the operational process. Nokia at a time was not
bothered with implementing innovation in the mobile phones that they were manufacturing.
Nokia was primarily focussing on performing branding rather than providing proper features in
the phones. Lack of using the latest technologies in mobile manufacturing process of the mobile
phones have also affected the success of the organization. Adapting to the latest trends have
been the need of the hour and this have not been implemented by the research and
development system of the organization. Hence it can be said that the downfall of the brand
was due to the incapability of it adapting to the latest technologies.
Legal Factors: It can be stated that legal factors that are present in the operational
process of marketing and launching of the product have been one of the major issue that have
been faced by Nokia. As Nokia have been launching their products in different countries, hence
wise it can be stated that different policies of different countries are to be considered for
proper operational process.
Environmental factors: The e wastes that were generated by Nokia have been higher in
the initial stages, however they have been performing several activities that ensures that there
is a lessening of the e wastes that are generated. Nokia have been undertaking several policies
that aims in reducing the e waste generation. Corporate Social Responsibility have been one of
the major factors that increases the good will of the organization. This is the major reason that
Nokia have been working in developing a better relation with the clients.
Why the company would benefit from the insights of the analysis:
There are several advantages that Nokia will be receiving due to the implementation of
PESTLE analysis. One of the most important advantage that will be received by Nokia on

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performing the analysis is having a higher cost effectiveness. Gaining a better understanding of
the issues have been another major advantage that will be received due to the implementation.
Alertness development have also been a major aspect that can be considered for proper
performing the operational process. Performing proper exploit opportunities is another major
issue that is exploited and hence wise this will be having a better understanding.
Internal audit:
SWOT analysis:
SW analysis:
Strength: There are several strengths that Nokia have in its processing. The legacy of
Nokia have been one of the major aspect that is considered to be its major strength. Nokia has
a legacy of nearly 150 years. Nokia was one of the top brands before launching of the Apple IOS
and Android. This is the main reason that brand power of the organization have been very high.
Another major benefit that was thought of in the process was that the interface of the mobiles
have been very user friendly. It was one of the major reason that the users of the Nokia have
been highly satisfied with the user interface of the mobiles. One time they had the largest
audience base in the mobile industry. They were also having the largest variety of products.
This also helped in capturing different section of people. This have been one of the most
important aspect that Nokia was once at the top organization. Durability of the products have
been high and the robustness of the mobiles that are manufactured by Nokia have always been
on the higher end. This is also another strength of the products that are manufactured by
Nokia. The diversity of location of manufacturing and launching have been a beneficial situation
as we’ll. It can be stated that the exposure that the mobiles of Nokia get have been very high.
This also ensures that the sales of the products have been high. This is considered as the
strengths of the organization.
Weakness: The main weakness of the organization is that the technology that is used by
Nokia was not up to the mark. This led to the fact that proper assessment of the data analysis is
not performed. This is the main reason that proper management of the technology up
gradation was not performed. Another issue that was not performed is that features that were
provided in the mobiles of Nokia was way lagging from the other competing organizations. It
was seen that the competitive brands were majorly focussed on the implementation of the
Android or IOS. This leads to the fact that the features that they were providing were much
better than that of the Microsoft platform that Nokia was using. Supporting of different apps
have also been one of the major benefit that is received. Again it can be stated that proper
Nokia was not having a tendency of evolving. Another aspect that is considered is that the price
that was charged for the products manufactured by Nokia have been on the higher end. This
was the reason that they started failing in the competition as other brands were providing
better featured products in similar price range. This is the main reason that the sales of the
products were decreasing. Thus these are the basic weaknesses that was suffered by Nokia.
Selection of the platform of development has been the major weakness. Microsoft was initially
not flexible enough and hence wise the number of apps that are supported by the platform was
limited. This limitation ensured that the mobiles were not accepted by the mass anymore.
Market skimming process was also a weakness. The major issue that is considered is that the
board of management have not been proper and hence the approach that they have taken up

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was not much efficient and this was the main reason that the operational process was affected
in a negative manner. The products that are manufactured lately suffer from a voice issue. This
is the main reason that acceptance of the product have been in a lower end.
TO external:
Threats: The major threat of Nokia is the expansion of the mobile manufacturing
companies. The mobile manufacturing companies were having a proper analysis of the trend
and the requirement of the global audience and the products were manufactured in that
manner, however Nokia was not performing similar activities. Nokia was focussed on their own
manufacturing process and this led to the fact that they were unaware of the client demands.
This acted as a threat and this was one of the major reason that they fell down in the
competition and failed in performing their duties. These acted as a major threat. Another threat
that was faced is that the operational process of Nokia is that they have lately shifted their
platform from Microsoft to Android and hence they are way behind their competition in the
research and development process. Nokia’s other competitive organizations have been
performing the research and development process in the Android platform for a prolonged
period. This is the main reason that Nokia is not being at par with the competition.
Opportunities: There are still a window of opportunities that is to be considered in the
process. This is the main reason that Nokia is still existing in market. It can be stated that the
good will that Nokia possessed back in olden days are still maintained. This is the main reason
that Nokia still has a dedicated audience base. This is the main reason that the products that
are launched by Nokia are still considered and bought. Another aspect that is maintained by
Nokia is that the robustness of the mobiles are kept. This maintaining of the robustness of the
mobiles ensures that this provides a competitive edge to the brand. This is also considered that
the separate audience base that of Nokia is very loyal and hence they are highly affiliated to the
products of Nokia. Another opportunity that Nokia has is the immense wealth that they can
invest in the marketing of the products. This increases popularity of the products and hence this
also gains attraction of the audience. Another opportunity is that Nokia has been spending huge
in the research and development department. This will be imposing a positive effect on the
operational process of Nokia. This is also another aspect that is to be considered. These are the
opportunities that Nokia still possess and can make use of and get back to the stature where it
was in the earlier stage of mobile evolution stages.
Micro economic:
Supply and demand
Supply and demand is also needed to be considered by Nokia for proper understanding
of the business management section. This leads to the fact that better assessing of the pricing
of the products can be made. This also ensures that deciding of the unit price can be made in a
better manner. Considerations regarding the competitive market and the financial assets that
are possessed by Nokia will be analysed in a proper manner. This analysis of the section also
ensures that the pricing will be performed as per the demands of the products. It can be stated
that in case the demands of the product is high and supply of the product is low the price that is
needed to be set, needs to be high. Again, in case the demand of the product is low than the
supply of the product, Nokia will be needing to axe the price. There is a direct relation in
between the supply and demand of the products.

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Elasticity
Price elasticity
Price elasticity have been one of the major aspect that is to be considered for proper
management of the change in percentage of the quantity that is in demand and the change in
percentage of the price that is considered in the operational process. It can be state that in case
the product has a small change in price which is accompanied by the large change in the
quantity that have been demanded, the product is considered to be elastic in nature. Again if
there is a large change in the price is made and however there is low change in the demand of
the product, the product is termed is inelastic in nature. Attaining inelasticity of the products
have been one of the major aspect that is considered and hence wise this proposes proper
management of the product can be made.
Cross elasticity
Cross elasticity is mainly focussed on proper analysis of the assessment of the change in price of
other products and hence wise leading to alteration in demand of the product. This is one of
the major aspect that is to be considered by the management of Nokia. It can be stated that to
get into the competition, Nokia might be getting befitted due to the theory. It is seen that
Samsung and Apple who were the major competitors of Nokia have been focussing on
manufacturing costlier mobiles. This is the main reason that Nokia being focussed in a certain
range of product, the sale of the products manufactured by Nokia can be on a higher end.
Income elasticity
Income elasticity have been one of the major aspect that is to be considered for performing the
assessment of the segment of product that is selected. It can be stated that the mobiles that
are sold by Nokia generally targets and mid income based audience. This is the main aspect that
is considered. Hence the product is not considered as a luxury product.
Oligopoly
Oligopoly is attained only if a proper grip is established in between the audience and the
sellers. Nokia in the initial stages had this opportunity as the entire mobile industry was based
on a few organizations. However, at this point of time this is eliminated and hence this is one of
the major aspect that affects the functional process.
Limitations of microeconomics
The major limitations that are seen in this case are namely having excessive
generalization in the processing of the business analysis. Another issue that is faced is that
excessive thinking of aggregates have been a major aspect that is to be considered. Presence of
heterogeneous elements have also acting as a limitation. Developing of a functional relativity is
a must in case of micro economics and this acts as a major issue that is present.
Conclusion
From the above discussion, it can be stated that Nokia was once a top notch brand who
ruled the mobile industry. However, due to some barriers they were not able to stay up to the
mark. This have affected the stature of the organization and they have faced a downfall. Again
it can be stated that with the help of the PESTLE analysis different sections of Nokia and its
operational process that is needed to be provided. SWOT analysis is also provided. Different
mobile platforms were introduced by different brands. It was observed that there were

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managerial issues that were present in the system as well. This was also one of the major
reason that have affected the operational process of the brand Nokia. Lack of vision have also
been one of the major issue that have been faced by the brand Nokia which was also a reason
of downfall of the organization.

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