Strategic Planning and Operational Planning: What are the Differences
Maria Peloponisiou~ 3 min Reading time | 02. Dec 2019
Planning is a hugely important part of running a business. In addition to this, it can help you to maintain your goals, your mission, and your vision. We use planning to help us make decisions about future events and to fulfil those all-important business objectives. Planning that occurs at a corporate level is known as strategic planning. However, when planning takes place at a functional level it is known as operational planning.
Strategic planning deals with a business’s long-term goals, operational planning deals with the short-term goals and can help to set priorities. However, there is often some confusion between strategic and operational planning. This article aims to help you understand the differences between the two:
Definition of Strategic Planning
Strategic Planning is a process which is undertaken by top-level management. Top-level management decides:
Where the organisation wants to go in the future
What can be done to achieve the objectives, goals, and mission
This process is analytical and it examines almost every part of the business, from the micro to the macro. The whole process helps to define the ambition, the priorities, and the vision. It’s these aspects that will help the business reach its desired goal.
The planning that takes place is not specifically for a certain department within the business, rather, it is for the whole organisation. This type of planning takes place to determine both the internal and the external environment. It’s these environments which influence the business.
The strategic plan will focus on the:
Strengths, weaknesses, opportunities, and threats (SWOT)
The portfolio analysis
Political, economic, social, and technological environment analysis (PEST)
New competition, rival sellers, buyer bargaining, substitute products, and supplier bargaining power
All of these tools help the businesses management company to come up with a strategy that will help them lead the business to its goals.
Definition of Operational Planning
Operational planning can be defined as a process that helps to pre-determine a business’s daily activities. The planning procedure is there to support strategic planning so that the businesses goals can be accomplished. When operational planning takes place, the short-term objectives are considered.
The function of this process is performed by middle-level management and includes operations and business activities over a short-term period.
When using the operational planning process, the business is divided into different departments, units, and divisions. This is so planning can be performed on a more individual level.
Features of an operational plan include:
Measuring the performance
The maintenance of standards
The activities that need to be performed
An achievement of any desired results
Key Differences between Strategic and Operational Planning
The key differences between strategic and operational planning are:
Pursues the vision
Plans to achieve objectives
Is supported by operational planning
Is not supported
Considers internal & external environment
Only considers the internal environment
Undertaken by top-level management
Undertaken by middle-level management
Covers the entire organisation
Covers a department or unit
Planning can involve any business interest; however, it needs to be undertaken properly so the businesses vision ca be achieved. Operational and strategic planning are two different types of planning that have different techniques, Strategic planning involves working to achieves goals, missions, and the vision. Operational planning involves working to ensure the day to day activities of a business are achieved.