Business and Economic Environment

             Changes and variation in the economic environment of a country directly draw impact on the business. Nokia is working successfully in Oman. Business cycle of Nokia represents the rise and fall of the business operations in the market. When the economic environment becomes negative for the Nokia, management tries to make new policies for the survival of the business. Increase in GDP, international trade, employment, and growth is a positive factor for the business of Nokia as because of these customers spending and purchasing trend increases. Currently in Oman GDP is showing growth trend. In 2017, the country recorded the GDP of $72.64 billion, and employment rate 3.25% that indicates that with the increase in purchasing power of the population spending is also increasing. Increase in customer spending is a positive factor of Nokia as it will result in increase in sales. While inflation rate 1.6% that is lower than other countries, however, the government need to control the inflation rate in order to promote the industry and economic growth of the country.  The decrease in inflation rate will support the business of Nokia. 

Figure 1 GDP of Oman 1960- 2010

P2)

Impact of Government Policies of Business and Economic Environment

            The government of the country develop policies to regulate money circulation, business, and economic growth and to control inflation. Changes made in Policies and introduction of new policies affect the business of Nokia Company. Government policies can be related to the fiscal policy, transport policy, competition policy, economic policy, regional policy, and environmental policy. Oman government is working on Free-regional trade policy that will not only strengthen the economy but also increase the chances for the Nokia Company to expand its operations by importing raw material for manufacturing at cheap cost and selling their products in other geographical areas of Middle East (Omzest.com, 2018). Environmental policy of Oman to make the operations eco-friendly encourage the Nokia Company to redesign their production engineering to introduce eco-friendly products. Oman government has introduced the ambitious privatization plan to support an economic development policy that will support the Nokia Company to expand its operations in Oman.

P3)

Impact of Government spending of Business and Economic Environment

             In Oman, government spending is decreasing with time. In 2016 government spending was recorded as 6124.80 OMR million while in 2017, it decreased to 5571.60 OMR million. The local level of government spending includes expenditures on the development of schools, cities, special district and towns. While opposite this, regional government spending relates to the whole region. National level government spending includes all the expenditure of a state government that only relates to the development of the whole state or country rather than region. When government spending goes up tax rates also becomes higher for the people. As a result of this purchasing power of the customers goes down. Considering this factor decrease in government spending is a positive factor for the Nokia Company working in Oman. Reduce government spending will encourage people to have a better lifestyle, buy new products and services as because of the decrease in tax rates their income and savings are also increased (Courses.lumenlearning.com, 2018). In such a situation, people can also buy new expensive products introduced by the Nokia Company. The company can even earn huge profit through increasing prices as in such situation people can afford to buy relatively expensive products.           

Figure 2 Government Spending in Oman

Source: https://tradingeconomics.com/oman/government-spending

P5)

Impact of Global Factors of Business and Economic Environment

            Global factors such as stock market fluctuations, emerging economies, Global warming, political stability and war, trading Blocs, and world trade organization can influence the business of Nokia Company in Oman at different levels (Gulfnews.com, 2016). World trade organization regulates the trade, changes in their policies sometimes make the trade easy for Nokia Company or sometimes difficult. WTO supported the free trade agreement between the US and Oman, therefore, Nokia can easily import their required material from the US without paying the extra tariff and trading expenditure. Outsourcing polices are also supportive of Nokia company. Nokia company use outsourcing strategy when they require highly technical work (Wto.org, 2014). However, other than outsourcing Oman also support the expatriates for short-term assignments and projects. Therefore through outsourcing and inviting expatriates, Nokia Company is capable to produce High-quality products that increase the chances of sales and benefit the company in financial terms.