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Nokia Company: Management Analysis Report


External Factor Analysis Summary for Nokia

External factor Analysis Summary for Nokia comprises of the external factors which involve opportunities and threats. Among others is the Societal Environment, from which most of the employees working in the company come. Nokia has a total of ten branches worldwide and 58,000 employees. In its operations, however, the company faces a number of challenges which include high corporate taxes and low productivity which are a result of the Finnish society based in Finland. This society has a total of 23,000 employees from the organization and follows a social-democratic model. Nokia hence becomes forced to pay off its share of the tax, which brings down its profits to a considerable extent.

Benefits Earned By Nokia Company


Some of the opportunities experienced by the company include the recruitment of staff. The company has to recruit highly qualified staff to run its operations. In this regard, the company spends quite a lump sum of money in paying these employees and organizing educational and training programs for them. This ensures that the employees develop their talents fully and become centered on exceptional performance (Andrei. G, 2008). The company also offers a variety of internship programs, which mainly focus on the attraction of talents at an early stage for careers. This enhances its competition and enables it to outdo other competitors in the market. Most of the employees of this company come from the upper-level education system which may be composed of universities and polytechnics.

Task Environment

The task environment is another external environmental factor affecting the company. It incorporates political issues that are frequently emerging in markets and creating instability in the affected economies. These instabilities have a significant effect on the currency of the country and may, as a result, destabilize the profit margins for Nokia as a company (Dennis.B, Randall.S and Tarique, 2012). The company also takes concern for the working environment of its employees. This is by ensuring that they do not get exposure to hazardous chemicals, that may lead to dreadful diseases, such as cancer, and ensuring that used chemicals and other by-products get dumped appropriately. Failure to meet these requirements may cost the company a lot of funds as it increases its expenses.

Threats Experienced by Nokia Company

Health Concerns

Some of the threats experienced by this company include the fact that the technology used in cell phones may lead to health troubles. This is as a result of the electromagnetic radiation that gets transmitted by the cell phones (Haim.M and Johannes.Z, 1999). This calls for frequent research on ways of preventing radiation from affecting the cell phone users. For this reason, therefore, the company spends a relatively large amount of money in maintaining trust and confidence in users of its products.

Human Rights Issues

Another threat involves the fact that Nokia solely depends on the growth rate of cell phone providers and the opening of new markets in maximizing its sales. Failure of these companies may lead to loss of massive sales for the company leading to substantial losses. A significant number of the cell phone providers are also considering coming up with their own brands of phones, which reduces the sales of the company to a considerable extent.


Increasing market shares

Other providers still consider building their own manufacturing firms and factories which will enable them to manufacture their own cell phones. This creates new competition, which the company needs to deal with accordingly. This makes competition in the market very intense as the competitors tend to have high bargaining power.

Product Substitutes

The manufacturers are also coming up with innovations such as the music phone introduced in Las Vegas by the Motorola Company. Apple manufacturers also introduced a new phone, which bears all the features of the iPod and has the cell phone capabilities, as well as Internet communication features such as email, search features, maps, and browsing. Another threat is Skype which offers low-cost alternatives to cell phone users.


Nokia as a cell phone manufacturing company has both benefits and threats in its operations. These include high sales volume as a result of large markets and highly qualified staff. The company should derive ways of dealing with competition from other manufacturers and cell phone providers. This can be attained by developing new inventions and unique products and availing them to its customers at a cheap and considerable price.

External Factor Analysis for Nokia
Table 1. External Factor Analysis for Nokia.


Dennis.B, Randall.S and Tarique. (2012). International Human Resource Management: Policies and Practices for Multinational Enterprises. Rutledge.

Haim.M and Johannes.Z. (1999). Survival of the Smartest: Managing Information for Rapid Action and World-Class Performance. John Wiley and Sons publishers. New York.

Andrei. G, (2008). Host Identity Protocol: Towards the Secure Mobile Internet. John Wiley & Sons publishers. UK.

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1. IvyPanda. "Nokia Company: Management Analysis." August 29, 2020. https://ivypanda.com/essays/nokia-company-management-analysis/.


IvyPanda. "Nokia Company: Management Analysis." August 29, 2020. https://ivypanda.com/essays/nokia-company-management-analysis/.


IvyPanda. 2020. "Nokia Company: Management Analysis." August 29, 2020. https://ivypanda.com/essays/nokia-company-management-analysis/.


IvyPanda. (2020) 'Nokia Company: Management Analysis'. 29 August.

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