Strategic planning and tactical planning: basic concepts, types, principles and goals, differences

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:53

Planning is an important activity for every business. Depending on the lead time, there are different types of this process. The fundamental varieties are strategic planning and tactical planning. They have specific goals and objectives, and also apply appropriate techniques for analysis. The main properties of these types of planning, their principles will be discussed further.

General characteristics

Strategic, tactical and operational planning allow you to predict the state of the company in different perspectives. This is an important job that managers of any large and medium-sized enterprise do. Without planning, it is impossible to make the right decisions while maintaining a competitive advantage in the market.

The implementation of an organization's strategy requires the implementation of tactical decisions. Moreover, the time periods allotted for this can be very short. Strategic planning is also called prospective. It is aimed at solving global processes. Long-term planning cannot be done without tactical or current forecasting. Strategic goals are achieved in stages. Therefore, the lead time when analyzing the company's prospects should be different.

Strategic, tactical and operational planning are interconnected. However, they have fundamental differences in the methods of implementation, as well as in the structure of decisions and the timing of their implementation in the future. Current forecasting is an integral part of the development of a long-term plan. It specifies the indicators, as the state of the company in the near future is more predictable.

There are different types of strategic and tactical planning. They are aimed at achieving different goals. So, current (tactical) forecasting includes short-term, operational plans. They help to link with the help of estimates, budgets the main activities of the company. At the same time, plans are developed for all functional units. These include personnel development, research, production and finance, sales, etc.

The complex of tasks that are solved with the help of tactical planning includes the development of a plan for profit, balance, cash flow. These forms of financial statements reflect the financi althe state of the company in the current period and in the future. The current plan is for one year.

To create a short-term plan, sales data, sales data, and marketing analysis results are used. On the basis of the forecast of sales indicators, the production volume is planned. It also determines the need to load production capacity, purchase fixed assets, as well as the amount of labor.

Strategic, tactical and operational planning of personnel, material resources, other areas of the organization's activities are related processes. But its current form is used as the main plan for the smooth operation of the enterprise. It is used to develop an implementation plan. They push off from him, creating other important plans.

Long-term

Strategic, tactical and operational planning of personnel, production, other activities of the organization allow you to make the right decisions when choosing the direction of the company. Each organization has its own goals, which can only be set and achieved by considering the state of the enterprise and the industry as a whole in the future.

Strategic planning is one of the functions of strategic management. In the course of this activity, goals are set, and ways to achieve them are chosen. This type of planning is the basis for making almost all decisions of managers. The functions of motivation, organization and control are focused on them.

If the company is notuses the benefits that strategic planning opens up, employees will not be able to clearly understand the goals of the company, as well as the direction of its activities. Therefore, it will not be possible to manage all workers. It is the strategic plans that are the basis for this process.

Forecasting in the long term provides an opportunity for managers and owners to assess the possible paths and pace of development of their organization. Also during this process, the global market prospects are determined. Not only the alleged development of the organization, but also its environment is being investigated.

Previously, companies did not use all types of planning during the pricing process. Strategic, tactical and operational planning differ in the level of complexity. Forecasts for the long term used to be made only by large corporations. But today the situation has changed somewhat. To maintain a competitive advantage, an organization must plan its work in relation to likely changes in the external environment. Therefore, representatives of medium-sized businesses also began to forecast their activities in the future.

Mission, goals and long-term planning process

Considering the essence of strategic and tactical planning, it should be noted the features of such processes. In any organization, remote forecasting starts with the mission of the organization. It is a reflection of the raison d'être of the enterprise, its philosophy.

Mission meansa global concept that defines the movement of the company at the moment and in the distant future. It details the status of the organization, its main principles in work, the intentions of managers. The mission specifies the most important characteristics of economic activity. The mission determines what resources will be allocated to, which areas are chosen as promising, and which ones should not be paid attention to. The financing process in this case is directed.

Mission reflects priority values. It does not depend on the current state of affairs of the organization. It should not be affected by the financial problems of the organization. In the process of describing the mission, it is not customary to indicate that the company operates in order to generate income. Although this is the main aspiration of any organization in a market economy.

Goal allows you to specify the mission. This allows you to complete the process of implementing the main idea in the management process. The goals of strategic planning are:

• Measurability, specific volume.
• Timing is clear.
• Consistency, consistency with other missions of the company.
• Possibility of confirmation by resources.
• Targeting, controllability.

Strategic and tactical planning for marketing, finance, human resources, etc. are related components of a single process. They cannot contradict each other. Otherwise, this would bring dissonance into the overall picture, would hinder progress towards the goal. Strategic planning consistsof the following steps:

1. Formation of the mission, setting goals.
2. Analysis of the market, strengths and weaknesses of the organization, its opportunities and potential dangers.
3. Developing a specific strategy.
4. Its implementation in practice.
5. Assessment, performance monitoring.

Strategy analysis

The system of tactical and strategic planning is based on the results of analysis, marketing, financial research of the organization's activities, its environment. After defining the mission and goals of the organization, the strategy is built. Based on this, the policy of the organization is developed.

The main element of long-term planning is analysis. It may include different elements. Such analysis is also called portfolio if it is carried out for a diversified company. This is a control element that allows the management of the organization to evaluate its activities in terms of the effectiveness of the use of resources. Also, with the help of such studies, hidden trends that negatively affect the work of the enterprise are revealed, as well as reserves are found to improve the competitive position in the market.

One of the main methods of portfolio analysis is the construction of matrices. With their help, production, processes, products are compared according to certain general criteria. Matrices can be formed in three ways:

1. Table method. Parameter values thatvary over time, appear in ascending order. The analysis is carried out from the upper left corner of the table to its lower right corner.
2. Coordinate approach. The values of indicators increase as the point of coordinates is crossed. The analysis is made from the lower left dor to the upper right corner.
3. Boolean method. This approach is most common in foreign practice. It involves analyzing the portfolio from the bottom right to the top left.

At different levels of planning, strategic, tactical analysis allows you to evaluate prospects, identify reserves, control progress towards the goal, etc. This tool is also used to study the organization's environment. This approach allows you to assess your own position in the market, develop a development strategy and gain new competitive advantages.

In the course of such work, they study the external environment as a whole, as well as the immediate environment of the organization. Then the internal environment of the enterprise is analyzed.

Choice and implementation of strategy

Considering the features of strategic and tactical planning, it is worth considering the process of formation and promotion of the company's chosen goals at different levels of development. So, on the basis of forecasting in a distant perspective, a strategy is formed. This is a qualitatively defined, long-term direction of the company's activity, which should lead to the achievement of the organization's goals within the specified time frame.

The strategy is chosen withconsidering the following factors:

• company's position in this market;
• industry development prospects;
• taking into account the technologies that the company has.

After choosing a long-term direction of movement, the period of strategy implementation begins. This is a critical process, since its course determines whether the organization will achieve its goals. The implementation of strategic plans is carried out through the creation of special programs, the development of budgets and procedures. They can be considered in different lead times. There are several factors that influence the successful implementation of the strategy:

• Plans and goals of the developed strategy are communicated to each employee. Employees must understand what the organization is striving for. This allows the entire workforce to be involved in the process of implementing the strategy.
• Resources must be delivered to the appropriate funds on time. The management of the company controls this process. Managers must form a plan according to which target installations will be implemented.
• The distribution of responsibilities between the management of different levels. This allows you to solve the assigned tasks by distributing them among the performers.

Periodic evaluation of how the process of achieving the set planning goals is progressing is mandatory. Strategic and tactical plans must be subject to constant scrutiny of their implementation. To do this, an assessment is carried out in the following areas:

• do the principles of the chosen strategy correspond to the requirements and the state of the environment;
• expediency of the risk that was incorporated in the strategy;
• correspondence of the chosen perspective concept to the real opportunities and potential of the enterprise.

The process of implementing the developed plans is evaluated using a feedback system. We need control, which is carried out by managers of different levels, over the implementation of current tasks. Based on the research carried out, the previous stages are adjusted. Strategic control is based on the following principles:

• Calculation should be as accurate as possible. Due to uncertainty, inaccurate analysis, the project can turn into an abstraction, which is not possible to implement. This is unacceptable, since the financing of activities must be purposeful. Otherwise, resources will be directed to unnecessary, unpromising directions. At the same time, the attention of managers should be focused on payback indicators, and not on budget control.
• At the checkpoints of the product life cycle, you need to do an assessment of cost recovery. The project continues as long as the payback exceeds the benchmark cost.

Functions of leaders

The heads of different levels are responsible for the development, implementation and control of the selected areas of strategic and tactical planning at the enterprise. Managers perform a number of functions during this process:

• Carry out a thorough study of the external and internal environment of the company, understanding by employees of their goals. They must expandstaff awareness of ideas, tasks and plans.
• Make a decision on the advisability of financing various activities of the organization.
• Form the organizational structure.
• Initiate appropriate changes within the organization.
• Revise plans to achieve strategic goals and objectives if unforeseen circumstances arise.

If necessary, managers can carry out restructuring, which can be carried out in different forms:

• radical;
• moderate;
• regular;
• insignificant.

The choice of organizational structure depends on the diversity of the organization's activities, the size of production. This may also be influenced by geographical factors, applied technologies, attitude to the structure of personnel.

Strategic and tactical planning in management allows you to form optimal connections within the company. There are different styles for applying changes. Control by managers allows you to determine whether the implementation of specific tasks will lead to the realization of the main goal and mission.

Planning the current period

There are certain differences between strategic and tactical planning. These are two interrelated processes. Tactical planning is used to properly allocate enterprise resources. This allows you to achieve strategic goals.

Each type of planning must answer certain questions. So, strategic planning allows you to determine what exactly the company wants to achieve. Tactical forecasting focuses on the means by which the appropriate state is to be achieved.

If the lead period is no more than a year, you can refine or correct, specify the chosen strategy. Therefore, in the course of tactical planning, a choice is made of actions that are reasonably most effective in achieving the goal.

This process involves two stages. During the first period of tactical planning, a list of company tasks is prepared. During the second stage, the corresponding actions are performed during their execution.

In the process of preparatory work, information is collected, refined and systematized. These data are analyzed, which allows you to adjust the direction of the company. Separate tasks are set for specific structural units based on the results of the research. Appropriate measures are developed and included in the plan. This process is documented and confirmed by leaders.

Goals and objectives of tactical planning

Strategic and tactical planning in management allow you to solve different problems and set different goals. This is necessary for the effective operation of the company. In tactical forecasting, the following goals are pursued:

• Identification of reserves thatwill help to achieve the highest results in the course of the company's activities. For this, a financial and credit mechanism is used.
• Determination of cost-effective, optimal norms in the process of using working capital, sources of their formation. Ways of generating and distributing profits are also being explored.
• Formation and distribution of funds in accordance with the characteristics of production programs.
• Determination of relations with banking, credit organizations, state funds, other structures that are involved in the distribution of funds.
• Ensuring the sustainable financial position of the organization. To do this, incoming and outgoing resources must be balanced.
• Creating conditions for the relationship of relevant indicators, their continuity.
• Monitoring the distribution of finances and the progress of the implementation of the adopted indicators.

Strategic and tactical financial planning are inextricably linked. They mutually influence each other. But each of the processes has a specific area of responsibility.

Differences

To better understand the features of strategic and tactical planning, the differences between them need to be considered in more detail. Characteristics are inherent not only in their goals, but also in the results, the length of the lead time, the participants, etc.

Tactical planning complements and refines the strategy. It allows you to choose the most appropriate actions that will achieve the goal in the shortest possible time. Tactics is one formstrategy expressions. Their goals are related. However, the differences between strategic and tactical planning are significant. If we imagine the development of the company as a movement to the top, then the strategy determines the ultimate goal of the activity. At the same time, tactical planning is the steps that you need to go through to reach the top.

There are several key characteristics that differentiate these two processes. Strategic planning and tactical planning differ in their goals. In the course of the current forecasting, such a way is determined for the use of assets that will allow you to get the maximum profit. The purpose of strategic planning is to create or improve assets that increase the value of the company.

The result of current activities is net profit in the reporting period. Long-term planning determines the result in obtaining positive results in the course of investment activities, capitalization of assets.

Detailing differences

Strategic planning and tactical planning also differ in detailing the development of the forecast. In the first case, general lines of direction for the movement of the organization are developed, and in the second, they are specified.

Strategic planning and tactical planning differ in the lead time. In the first case, it is long-term (more than a year), and in the second, it is short-term (no more than 12 months).

In strategic planning, decisions are made by a few top-level managers. tactical forecastingis within the competence of mid-level specialists.

Strategic planning can be carried out both regularly and irregularly. Forecasts in the current period are carried out according to a predetermined schedule.