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Nokia Corporation SWOT and PESTLE Analysis

ID : 52590053| Feb 2023| 15 pages

COMPANY PROFILE -Nokia

Business Sector :Telecommunications Infrastructure

Operating Geography :Finland, Europe, Global

About Nokia :

Nokia Corporation styled as NOKIA, is a Finnish global company that started in 1865 dealing with information technology products. The headquarters of Nokia is in Espoo, in the greater Helsinki metropolitan area. The company operates through four segments: Ultra Broadband Networks, Global Services, IP Networks and Applications, and Nokia Technologies. For Nokia HMD Global Oy is the exclusive global licensee for Nokia branded mobile phones. The company has subsidiaries like Bell Labs, Nokia Networks, Space-Time Insight, and many others. In the early 2020’s Nokia completed the acquisition of Elenion Technologies, a U.S. based company focusing on silicon photonics technology to improve economics of advanced optical connectivity products. The company has approx. 98322 employees as of 2020 and has operations across more than 120 countries globally.
Nokia's USP centers on the durability of its products, which are simple to operate and offered at economic prices on the market. Nokia is committed to connecting the unconnected and to the ethical principles of doing business and supporting equality. Nokia’s Mission Statement reads, “Connecting People” and its Vision Statement reads, “Nokia wants to create a new world; to transform a big planet to a small village. Their vision is to create, build, and encourage people from all countries to communicate with each other in order to create a world where everybody is connected.”

Nokia Revenue :


EUR 23,315 million – FY ended December 31st 2019 (year-on-year growth 3.2%)
EUR 22,563 million – FY ended December 31st 2018

Competitive Analysis of Nokia

SWOT
PESTLE

Nokia Corporation referred to as Nokia; is a Finnish multinational telecommunications, information technology, and consumer electronics company. The company has operated in various industries over the past 150 years. Nokia continues to be a major patent licensor for most large mobile phone vendors and is the world's third-largest network equipment manufacturer. Thus, the SWOT Analysis framework helps the organization to identify its internal factors such as -strengths and weaknesses, & external factors such as - opportunities and threats. SWOT analysis is a vital strategic planning tool that can be used by Nokia Corporation to analyze the company’s Strengths (S), Weakness (W), Opportunities (O) & Threats (T) it is facing in its current business environment. Nokia’s strengths lie in it being leader in high-performance. Nokia delivers extraordinary 5G which has the potential to help increase subscriber revenues with more exciting, immersive and convenient high-value services. The company has a strong research and development team along with a strong brand portfolio. In October, Nokia announced a contract with NASA to build a 4G mobile network for astronaut usage on the moon. The $14.1 million contract is through subsidiary Bell Labs, and the program is expected to launch in 2022. Weaknesses are the areas where the company needs improvement. Nokia is majorly dependent on network equipment division and has high day inventory compared to its competitors. . Nokia’s shares can further be downgraded because of lower revenues in its network segment, a conservative margin trajectory and slow growth in profitable patents business.

Opportunities are the element in the environment that the business could exploit to its advantage. The rise of online video media opens up business opportunities for Nokia. It is also expanding network sales to selective vertical markets. In June, Nokia won a 5G contract worth approximately $450 million from Taiwan Mobile to build out the telecom operator's next-generation network as the sole supplier. Threats are elements in the environment that could cause trouble for the business. Nokia faces strong competition from various companies like Google, Apple, Siemens, Samsung and BlackBerry. 5G regulatory delays in Europe is also threatening its project plan.

The SWOT analysis of Nokia is presented below:

Strengths
Weaknesses
1. Leader in high-performance, end-to-end networks
2. Strong R&D department.
3. Wide Range of Business Groups.
4. Established sales & marketing infrastructure
5. Strong network communications brand portfolio
1. Weak performance of Cable Network Division
2. Majorly dependent on network equipment division
Opportunities
Threats
1. Opportunity to tap the 5G network market
2. The rise of online video media opens up businesses for Nokia.
3. Acquisition of SpaceTime to improve its Software business group
4. Creating new licensing opportunities
5. Expanding network sales to selective vertical markets
1. Risk against Patent Licensing Business
2. Strong Competition from various companies
3. Seasonality and cyclical nature of projects
4. 5G regulatory delays in Europe
SWOT & PESTLE (combined)
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Detailed SWOT Analysis of Nokia

 

Strength

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Weakness

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Opportunity

1. Opportunity to tap the 5G network market: The factor affecting it was the increasing demand for the 5G network. It is already experiencing 5G demand from developed countries like the US and South Korea. It is also trying to expand its demand in international markets like Japan, China, the Middle East, Nordic countries and the UK. Nokia also claimed to have 45 commercial 5G deals to Q1 2019 Also, it can able to bag more 5G contracts due to the ban imposed on Huawei, one of its competitors, by the US government. Companies like BCE and Telus are also looking for alternatives to Huawei in the Canadian market.

2. Rise of online video media opens up businesses for Nokia: The Deepfield technology of Nokia can open up its chances of getting revenue to the company. Telefonica Spain adopted Nokia's Deepfield cloud intelligence for greater visibility into application and serve traffic on its network. Nokia’s Deepfield software provides operators with video services performance and visibility into cloud applications. In USA, Walt Disney (DIS), AT&T(T), Comcast (CMCSA) and T-Mobile (TMUS) are going to launch online video services that can open a business for Nokia.

3. Acquisition of SpaceTime to improve its Software business group: Nokia software segment saw a decline of 12% on year-over-year. SpaceTime can help in improving growth for Nokia Software business group by adding its products, market, and technology to the company's portfolio. SpaceTime has a variety of software solutions in areas such as the Internet of things (IoT), customer experience management and collaboration. It will also bring its talent and customers for Nokia. This expansion will also help Nokia in customer retention. By customer retention, it will help in bringing more stability to the company's software market and providing benefits to the customer as well as company, thus reducing market costs. High customer defection rates lead to large marketing expenses due to excessive promotion and designing a new market strategy to recover and replace old customers.

4. Creating new licensing opportunities: Nokia is focusing to generate revenues from patent and technology licensing and brand partnerships. It has one of the strongest patent portfolios in the technology industry that is from the innovations of Nokia, Nokia Siemens Network and Alcatel Lucent. By extensive research activities at Nokia Bells Lab, they are trying to innovate in multiple areas, particularly in cellular standard-essential patents. They are also trying to add new licenses in automotive, IoT, consumer electronics and their unique audio/visual technologies. Their Brand licensee for mobile phones and tablets, HMD Global, has launched a comprehensive portfolio of new Nokia branded phones. Their patent portfolio included 20,000 patents and has filed a patent on 1300 new inventions during 2018.

5. Expanding network sales to selective vertical markets: Nokia is expanding to several vertical markets of high performance, Web and cloud companies, transportation, energy and public sector due to the digital world and automation requirements of these sectors. To address the growing needs for high-performance networks, Nokia has formed Nokia Enterprise business groups that will find new solution to address the customer’s digitization and automation needs, will implement a combined sales organization and form a targeted portfolio.For web and cloud companies, Nokia is providing all IP led approach. Nokia offers mission-critical networks, solutions for digitization and Industrial IoT and industrial automation to TEPS customers. Nokia is targeting other verticals with automation platforms and private wireless networks to increase productivity and reduce costs of their operational systems.

Threat

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Major Competitors :

Key Business Segments / Diversification :

Nokia
Mobile Networks Fixed Networks IP/Optical Networks
Network Software Global Services
Telecom Technologies
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WHY BUY THIS REPORT?
TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
The Nokia SWOT and PESTLE Analysis report will offer the following:
  • The SWOT and PESTLE analysis report of Nokia offers a quick glimpse of the company’s internal and external factors shaping the brand and its operations.
  • The SWOT analysis of Nokia provides a comprehensive structure of company’s inherent internal strengths and weaknesses whereas the external analysis helps to identify the opportunities and eliminate threats.
  • Comprehend the role of technology and Nokia’s core competencies in shaping the company’s business and presenting the company with competitive advantage over its competitors.
  • The PESTLE/PESTEL/STEEPL analysis for a profound study into macro-environmental factors viz, political, economic, social, technological, legal and environmental and highlighting their impression on Nokia Corporation.
  • Comprehensive company analysis to gather information about company profile, business model, business plans, and marketing strategy including value proposition and revenue jumps.
  • Synopsis of Nokia’s penetration into 5G network market and other acquisitions and tie-ups.
  • Abstract information on Nokia’s business diversification, deriving its key business segments with further analysis of business case study.
  • Analysis of Nokia’s USP or Unique Selling Proposition, mission statement and vision statement.
  • Identifying the core values, key performance indicators and success factors that contributed to sustainable growth and proliferation.

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References used in Nokia SWOT & PESTLE Analysis Report

1. Nokia Company Website - https://www.nokia.com/

2. Nokia financial report Q2 2019 - https://www.nokia.com/about-us/news/releases/2019/07/25/nokia-corporation-financial-report-for-q2-and-half-year-2019/

3. Nokia financial report Q4 2018 https://www.nokia.com/about-us/news/releases/2019/01/31/nokia-corporation-financial-report-for-q4-and-full-year-2018/

4. Nokia about Us - https://www.nokia.com/about-us/

The detailed complete set of references are available on request in the 'Complete report' on purchase.

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SWOT & PESTLE.com (2024). Nokia Corporation SWOT and PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/nokia-corporation/ [Accessed 18 Apr, 2024].

In-text: (SWOT & PESTLE.com, 2024)

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Nokia SWOT and PESTLE analysis has been conducted by Nishant Singhal and reviewed by senior analysts from Barakaat Consulting.

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