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Among the external factors to be discussed in the case of Nokia are; competition, economical forces, legal and regulation forces (political), technology and innovation, social cultures & demographic and globalization.
Technology and innovation The world is turning to a global village; hence adopting new technology and innovation is paramount and has been associated with reduced production cost, provision of high quality products and services, efficiency, reliability, convenience and time saving.
Innovation especially in communication has helped Nokia popularize their products and service.
All these products and services enable people to enjoy music, videos, television, imaging, game, navigation among other things at their convenience.
Clients/customers of Nokia range from organization to individuals who sort after mobile communication and internet services.
Political conditions dictate expansion of businesses. Areas that have civil unrest are usually not good for business establishment.
Governments all over the world in most cases do play a part in telecommunication sectors and they put forward laws, regulations to be followed, such laws for instance concerning taxations, accounting standards, environmental laws directly or indirectly affects businesses such as that of Nokia Company.
These competitors developed affordable products that almost substituted the company’s products and services.
This thus made Nokia use huge funds in developing and popularizing their products and services and at the same time change the pricing policy.
When countries manipulated the interest rates, this had consequences for instance high interest rates depresses business as money in circulation will be small, on the other hand when the rate is lowered more money will be in circulation hence high purchasing power of customer, similarly the company is at a position to borrow more funds to expand the business.
Economy also dictates bargaining power of buyers, and due to price sensitivity, Nokia will be faced by this challenge.