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The development of strategic plans is a necessary part of a business. There are many types of business plans, and two of the most common include a tactical plan and an operational plan. Tactical and operational plans work to implement the company’s strategy. Although there are some similarities between tactical and operational planning, there are clear differences. Understanding the elements of tactical and operational planning will help you develop and implement your strategic objectives.
Tactical planning
Tactical planning is an extension of strategic planning and tactical plans are created for all levels of an organization. It establishes the specific measures necessary to implement the strategic plan of the company. The tactical plans are usually short term and describe what a company has to do, the order of the steps necessary to carry out these tasks and the personnel and tools necessary to achieve the strategic objectives of the organization. The tactical plan of a company can include the entry of many of its departments. After completing and implementing your company’s tactical plan, you should check it regularly to verify that your company is adhering to the steps indicated.
Operational planning
Operational planning focuses on the products and services of a company and develops plans to maximize market share and develop financial projections. Operational planning focuses on the production, equipment, personnel, inventory and processes of a company. An operational plan uses the organization’s financial indicators to analyze profitability. For example, the plan may include the analysis of the proportion contribution to determine which processes are necessary to increase profits. This could include focusing on selling high quality products or reducing variable costs.
Benefits
Tactical plans are beneficial for companies because the measures developed in the management plan will help you find inefficiencies in your operations. Once operational deficiencies are discovered, management can take the necessary measures to correct them. Tactical plans also allow companies to benefit from the contributions of their employees. Effective tactical plans must include the contributions of the people who participate in the daily operations of a company. One of the advantages of operational planning is that a company is able to analyze the effect of its operations on profits. Operational planning analyzes the financial situation of a company, identifies weaknesses and develops ways to increase profits.
Limitations
A disadvantage of tactical and operational planning is that the development process takes a long time. Some managers get lost in the process, since they spend an excessive amount of time planning and little or none executing the plan. Another disadvantage of tactical planning is that it can cause a slowdown in a company’s operations if the plan is extensive. This may possibly lead to a decrease in earnings.