Rapid changes in the internal and external environment require the company to formulate its objectives to incorporate the changes in the environment. Strategic planning involves identifying the goals to be accomplished after taking into account the factors that have an impact on the same. The goals of the company can be accomplished only through proper strategy.

Identifying the company mission is the first step in strategic planning. Many Indian companies have a strategy planning committee concentrating on each customer. They scrutinise the past performances achieved by the team, the advantages enjoyed during the previous year, the unexpected events that cropped up, and other threats and opportunities enjoyed during the last planned period.

On the basis of the past trends and future opportunities the company can set the objectives that are to be accomplished during the next time frame. It also includes those areas which have not yet been explored so far. The potentiality of the new objective should be then evaluated using the PEST analysis and SWOT analysis. Macro-economical factors that affect all the business entities like political, economic, social and technological factors can be analysed using the PEST analysis. The political aspects include the government policies, stability of the government, taxation laws, etc. The general economic conditions like the interest rates, inflation rates, and exchange rates, all have an impact in defining the strategy. With many Indian companies charging the foreign customers on dollar currency, the fall in the dollar requires the companies to draft its future strategy by providing cushion for the fluctuations in the exchange rates. Social factors include the changes in demography, their attitude, etc. With great changes happening in the technology the strategy should take into account the potential changes that can occur in the technical world and provide for the adoption of the same in the industry.

Once the influence of these factors have been analysed, the company can identify the challenges existing in the industry. Michael Porter has identified five major influencing elements namely, various suppliers, their policies, availability of substitutes etc, customers, their purchasing power, persuasive power of branding, government policies, capital requirements and other barriers to entry, pricing policies of competitors, substitutes etc.

On analyzing the power of the external factors on the company the internal strengths, weaknesses, threats and opportunities in various resources, goodwill, and other positive and negative reserves of the company are scrutinized. The SWOT analysis has to be done to know where the company lies and where it can be headed. The previous achievements and failures have to be studied to identify the opportunities that are to be explored and defects that have to be corrected.

The steps in strategy planning do not stop at formulating the strategy. The company has to keep a close watch over the changes that happen in the environment and redraft the strategy in accordance to it. The hit on the dollar rates forced many companies to redesign the strategy to minimize the impact on the profitability of the company. The pricing policies were a major area which saw a transition during the recent months. Controlling measures must be set to analyse the situation and take the corrective measures to guide the activities to the goals of the company. The final success of the company lay in its ability to achieve the overall objectives set through proper strategy.