Strategic vs Operational Planning
Difference between strategic and operational planning is that strategic planning is made to achieve a company’s long-term objectives while operational planning is focused on achieving a company’s short-term objectives. Both are considered to be very important for organizations. Therefore, this article analyzes these two concepts, and the difference between strategic and operational planning.
What is Strategic Planning?
Strategy consists of a combination of competitive moves and business approaches used by the managers to operate the business. Strategic plan outlines the road map towards achieving the ultimate vision of the company. The top management is responsible for crafting the strategy.
Initially, in the strategy planning process, it is essential to analyze the internal and external business environment of the organization (micro and macro environment) and the current trends of the company. In order for the analysis of macro environment, PESTEL analysis and porter’s five forces theory can be used. In the SWOT analysis, SW(Strengths and Weaknesses) can be used for the analysis of micro environment and OT (Opportunities and Threats) can be used for analysis of macro environment of the organization. Then the company strategies must be focused towards the internal strengths and external opportunities in order to gain more benefits.
In a competitive business environment , it is a big challenge for the top management to make effective strategic plans for the company. Although it is a challenge for them, it is an essential requirement for the company as it shows the route in which all the resources need to be aligned with. The company success depends on the level of effectiveness in the strategic planning process.
What is Operational Planning?
Operational plans provide a detailed road map that outlines how activities will be accomplished and by whom. In other words, operational plans are highly tactical and short term focused. Operational plans are created based on strategic plans of the organization.
Operational planning can be considered as a management tool that facilitates the coordination of organizational resources such as financial resources, physical resources and human resources so as to achieve the goals and objectives in the strategic plan.
Operational plans should contain clear objectives, activities that need to be delivered, expected quality standards, desired outcomes, staffing and resource requirements and various other monitoring mechanisms. The middle management of the functional areas of the organization is responsible for creating the operational plans.
What is the difference between Strategic and Operational Planning?
• Strategic planning is focused on long-term objectives of the company while operational planning is focused on short term objectives of the company.
• Operational plans are created based on strategic plans.
• Strategic plans are created by the top management while operational plans are created by the middle management of the organization.
• Strategic plans are created to achieve the vision of the organization while operational plans are created to execute and implement the strategic plans.
• Organizations need to conduct both periodic strategic planning and continuous operational planning.