Questions and Answers
What is the difference between a Business Plan and a Strategic Plan?
Business Planning is a more generic term than strategic planning, although many people use it to refer to the process of creating a document used to woo potential investors in venture capital markets. The term can also be used to refer to an annual operating plan.
Generally speaking, business plans contain much more information about routine activities of a business which, although important, are often assumed to be stable and functional. Strategic Planning properly refers to the process of determining the appropriate course and direction for a business. There are many questions addressed in business plans that won't necessarily be of use in strategic planning. Basically put, strategic planning involves the very specific answers businesses will have to the following three questions:
- What do we sell?
- To whom do we sell it?
- How do we beat or avoid competition?
Particulars of, for example, finance, which may be of critical importance in a business plan, may play a reduced role in a strategic plan. This is not to say that finance isn't important, but rather that the focus of the strategic plan is on factors which will make the greatest difference for the company's success in the future. In many industries there are few differences between the financial structures of the competitors, so finance plays a limited role in competitive strategy for those industries.
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