Strategic, Tactical, and Operational Planning

Understanding the differences between these three types of planning is essential for creating effective business strategies. Proper planning can lead to positive outcomes in the short, medium, and long term.

Overview of Planning Types

• Strategic Planning: Long-term vision (3-5 years) for achieving objectives.
• Tactical Planning: Translates strategic goals into specific activities and tasks.
• Operational Planning: Short-term focus, detailing actionable tasks to meet tactical and strategic objectives.

1. Strategic Planning

• Definition: A management process to create a plan to achieve objectives and goals.
• Time Frame: Medium to long-term (3-5 years).
• Purpose:
  • Organizes and prepares the company for future direction.
  • Adapts during execution to respond to opportunities and challenges.
  • Creates competitive advantages.
• Key Components:
  • Identifies steps to achieve goals.
  • Focus can be on the entire business or specific areas (e.g., marketing, product launches).
• Tools:
  • SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats.
  • Porter's 5 Forces: Analyzes competition in the market based on five aspects:
    • Rivalry among competitors
    • Power of suppliers
    • Power of customers
    • Threat of new entrants
    • Threat of substitute products/services
  • Defines mission, vision, and values to guide the company.
• Strategic Goals: Medium to long-term, e.g., increase market share by 10%.

2. Tactical Planning

• Definition: Converts strategic plans into actionable tasks and areas of focus.
• Time Frame: Shorter than strategic planning (1-3 years).
• Purpose:
  • Directs specific departments or areas within the company.
  • Clarifies what needs to be done to achieve strategic goals.
• Examples of Tactical Objectives:
  • Produce 100 units of a product.
  • Train 10 employees per week.
  • Sell 200 units of a product per week.
• Key Questions:
  • What to do?
  • Is it possible to do?
  • Is it worth doing?
  • When will it be done?

3. Operational Planning

• Definition: Focuses on short-term execution of tasks to meet tactical objectives.
• Time Frame: Very short-term (3-6 months).
• Purpose:
  • Turns strategic and tactical objectives into actionable tasks.
  • Defines methods, processes, systems, responsibilities, and necessary resources.
• Examples of Operational Objectives:
  • Improve production processes.
  • Create training programs.
  • Develop marketing strategies for product sales.
• Key Questions:
  • How to do it?
  • Who will do it and by when?
  • What resources are needed?
• Tools:
  • Action plans to outline necessary actions, deadlines, responsibilities, and resources.
  • Recommended model: 5W2H (What, Why, Where, When, Who, How, and How Much).

Conclusion

• Summary of Connections:
  • Strategic Planning guides the overall vision and direction of the company.
  • Tactical Planning breaks down strategic goals into detailed action plans by departments.
  • Operational Planning ensures that tasks are executed effectively to meet established objectives.

Additional Resources

• For more on setting up and managing your business, visit our YouTube channel.
• Download our free e-book with key questions to assess your readiness to open a business.