A strategy determines what an organization needs to do to meet business objectives. A plan outlines how the strategy will be executed. It may take the form of an outline, scheme, program, blueprint, or layout.
Aspect
Plan
Strategy
Definition
A detailed, step-by-step outline of actions or activities to achieve specific goals or objectives.
A broader approach that outlines the overall direction and methods for achieving long-term goals.
Scope
Typically short-term and focuses on specific tasks, deadlines, and resources.
Encompasses both short-term and long-term perspectives, considering the bigger picture.
Timeframe
Short-term, often covering days, weeks, or months.
Long-term, often spanning years, with flexibility to adapt to changing circumstances.
Flexibility
Less flexible as it’s more rigid and focused on following a predefined sequence of actions.
More flexible, allowing adjustments and changes to adapt to evolving conditions.
Tactical vs. Strategic
Tactical in nature, addressing how to execute specific tasks effectively.
Strategic in nature, addressing the why, what, and how of achieving overarching objectives.
Role
Part of the strategic process, providing detailed guidance on how to implement elements of the broader strategy.
Integral to the strategic process, guiding overall decision-making and shaping the organization’s direction.
Focus
Narrow and specific, addressing immediate challenges or opportunities.
Broader and forward-looking, guiding the organization’s growth and competitive positioning.
Components
Contains action steps, timelines, responsibilities, and resource allocation.
Includes a vision, mission, goals, objectives, and a roadmap for achieving them.
At the most fundamental level, strategies determine how a business will achieve its goals.
The best strategies are robust, flexible, and adaptable when circumstances change. Effective strategies allow the business to build critical momentum and secure a competitive advantage.
Strategies are often prepared when collaboration, innovation, and creativity are of the utmost importance.
They tend to facilitate healthy debate from both sides of the argument and clarify how a company will further its mission and vision.
Some of the key components of a good strategy include:
Asking the right questions.
Learning lessons from the past.
Future predictions.
Committing to change.
Evolving when necessary.
Determining how to integrate, and
Analyzing potential pathways.
Note that every company should have an overarching strategy and not a set of strategies, plural.
Strategy encompasses a set of choices that determine where the company wants to be, how it intends to get there, and the skills, expertise, and systems that will allow it to win.
Tesla’s ambitions to become the most compelling car company in the world and accelerate the shift toward affordable, sustainable vehicles have been supported by one strategy.
The company entered the EV market at the premium end and is progressively reaching more price-conscious consumers via higher unit volume and lower prices.
Understanding plans
Plans dictate how certain goals are achieved and tend to be final. In other words, an unsuccessful plan is more likely to be scrapped and a new plan devised.
Since plans are more difficult to adjust, they tend to take longer to develop because organizations work harder to ensure every detail is correct.
Most plans include detailed information on the following:
The tasks and activities that need to be executed.
Roles and responsibilities.
A task and activity schedule, and
Clarification on how the strategy can be performed on time and within budget. This incorporates risk, quality, resource, stakeholder, change, and financial management, among other disciplines.
Plans are useful when efficiency and timelines are important. They provide a coherent framework that enables the organization to move in the same direction and establish certain milestones that must be met along the way.
Plans also eliminate false confidence at the organizational level and increase transparency at the employee level as they leave no room for assumptions.
Various types of plans can support different parts of the strategy. These include financial, tactical, contingency, succession, and operational plans.
Key Similarities between Strategy and Plan:
Goal-Oriented: Both strategy and plan are focused on achieving specific goals and objectives for the organization.
Forward-Looking: Both strategy and plan involve looking into the future and determining the actions required to reach desired outcomes.
Framework for Decision Making: Both serve as frameworks for decision-making, guiding the organization in allocating resources and prioritizing actions.
Support for Business Objectives: Both strategy and plan are essential tools for supporting and aligning with the organization’s overall business objectives.
Key Differences between Strategy and Plan:
Scope: Strategy sets the overall direction and approach to achieve long-term goals, whereas a plan outlines the specific steps, tasks, and timelines required to execute the strategy.
Flexibility: Strategies are more flexible and adaptable to changing circumstances as they provide a broader vision, while plans are more concrete and may require more significant adjustments if changes are needed.
Level of Detail: Strategies are often higher-level and conceptual, focusing on the big picture and guiding principles, while plans are detailed and operational, laying out specific actions and responsibilities.
Time Horizon: Strategies usually have a longer time horizon, guiding the organization’s efforts over several years, while plans tend to cover shorter time frames, often detailing actions for months or quarters.
Stability: Strategies are relatively stable and may remain unchanged for more extended periods, while plans may need revision and refinement more frequently as new information or challenges arise.
Case Studies
Healthcare:
Strategy: Improve patient outcomes through the integration of technology in treatment procedures.
Plan: Implement an electronic health record system by the end of the year, train staff over three months, and onboard 70% of patients within six months.
E-commerce:
Strategy: Increase market share by targeting a younger demographic.
Plan: Launch a social media marketing campaign on platforms popular among millennials and Gen Z, introduce youth-centric products, and offer student discounts.
Education:
Strategy: Enhance student engagement in online learning environments.
Plan: Introduce interactive digital tools and software by next semester, organize monthly online group activities, and offer tech support sessions for students.
Real Estate:
Strategy: Expand market presence in the urban residential segment.
Plan: Acquire three new urban properties in the next two years, collaborate with urban-focused architects, and run city-specific marketing campaigns.
Automobile Manufacturing:
Strategy: Establish a strong presence in the electric vehicle (EV) market.
Plan: Invest in R&D for EV technology, launch two electric car models by 2025, and partner with charging station providers.
Hospitality:
Strategy: Enhance customer loyalty and repeat business.
Plan: Introduce a loyalty program with tiered benefits by next quarter, offer exclusive deals to returning customers, and conduct feedback sessions every six months.
Banking:
Strategy: Boost digital banking adoption among traditional banking users.
Plan: Launch a user-friendly banking app with 24/7 customer support, organize digital banking workshops at branches, and offer incentives for online transactions.
Agriculture:
Strategy: Promote sustainable farming practices to enhance yield and soil health.
Plan: Organize quarterly workshops on organic farming, offer subsidies on green farming products, and establish partnerships with sustainable farming experts.
Retail:
Strategy: Improve in-store shopping experiences to combat online shopping trends.
Plan: Renovate store layouts, introduce interactive product displays, and offer in-store exclusive deals.
Entertainment:
Strategy: Diversify content to appeal to global audiences.
Plan: Collaborate with international artists for content creation, introduce subtitles in multiple languages, and conduct global surveys to understand viewer preferences.
Key takeaways:
A strategy determines what an organization needs to do to meet business objectives, while plans clarify how the strategy will be carried out.
The best business strategies are robust, flexible, and adaptable when circumstances change. They are prepared when collaboration, innovation, and creativity are of the utmost importance.
Plans dictate how certain goals are achieved and are more concrete in nature. Unlike a strategy that can be adjusted over time, plans need to be correct from the outset and if unsuccessful, it is better to move to Plan B than make alterations to Plan A.
Key Highlights:
Strategy vs. Plan:
A strategy determines the direction and approach to achieve long-term objectives.
A plan provides specific steps, timelines, and actions to execute the strategy.
Understanding Strategies:
Strategies are dynamic and flexible, allowing for adjustments as circumstances change.
They facilitate collaboration, innovation, and creativity, focusing on the company’s mission and vision.
Example: Tesla’s approach to entering the EV market at a premium and gradually reaching more segments.
Understanding Plans:
Plans are more detailed and concrete, outlining specific tasks, roles, and schedules.
Plans increase organizational transparency and eliminate false confidence by providing clear directions.
They encompass various types, such as financial, tactical, and operational plans.
Similarities:
Both strategy and plan are goal-oriented, forward-looking, and serve as decision-making frameworks.
They align with and support the organization’s overall business objectives.
Differences:
Strategy focuses on the big picture and long-term goals, while plans are more detailed and short-term.
Strategies are more adaptable, while plans are more rigid and require precise execution.
Strategies are conceptual, and plans are operational with specific actions and responsibilities.
Context
Plan
Strategy
Project Management
A project plan outlines the specific tasks, timelines, and resources needed to complete a project, including a Gantt chart with scheduled activities.
A project management strategy involves the overall approach to achieving project goals, including resource allocation, risk management, and communication plans.
Business Expansion
A business plan defines the objectives and outlines the steps to start a new branch in a different location, including budgeting, staffing, and marketing activities.
An expansion strategy considers market analysis, competitive positioning, and long-term goals for scaling the business into new regions or markets.
Product Development
A product development plan outlines the stages, milestones, and deadlines for creating a new product, specifying tasks such as design, testing, and production.
A product development strategy involves the approach to innovation, including market research, feature prioritization, and competitive differentiation.
Marketing Campaign
A marketing plan details the marketing tactics for a product launch, including advertising, social media, and email campaigns, with a defined budget and timeline.
A marketing strategy encompasses the overall marketing approach, defining target audiences, positioning, brand messaging, and competitive analysis.
Financial Management
A financial plan outlines a personal or business budget, including income, expenses, and savings goals for a specific period, such as a monthly or yearly budget.
A financial strategy involves long-term financial planning, such as investment strategies, risk management, and retirement planning.
Education
A lesson plan specifies the learning objectives, activities, and assessments for a single class session, ensuring that teaching goals are met effectively.
An educational strategy involves broader educational goals and approaches, such as curriculum development, teaching methodologies, and student engagement.
Healthcare
A treatment plan prescribes specific medications, therapies, and interventions for a patient’s condition, ensuring a systematic approach to their care.
A healthcare strategy focuses on the overall approach to healthcare delivery, including preventive care, patient engagement, and healthcare system improvement.
Sports Coaching
A practice plan for a sports team outlines the drills, exercises, and practice schedule to develop specific skills and prepare for upcoming games or competitions.
A coaching strategy involves the overarching approach to team development, game tactics, player recruitment, and achieving long-term performance goals.
Technology
An IT implementation plan details the steps and timeline for deploying new software or hardware within an organization, addressing technical requirements and logistics.
An IT strategy aligns technology with business objectives, covering areas like IT infrastructure, security, digital transformation, and technology partnerships.
Environmental
An environmental plan defines actions and goals for reducing carbon emissions, conserving resources, and implementing sustainable practices within an organization.
An environmental strategy involves the comprehensive approach to addressing environmental issues, such as setting sustainability targets, stakeholder engagement, and policy advocacy.
The ADKAR model is a management tool designed to assist employees and businesses in transitioning through organizational change. To maximize the chances of employees embracing change, the ADKAR model was developed by author and engineer Jeff Hiatt in 2003. The model seeks to guide people through the change process and importantly, ensure that people do not revert to habitual ways of operating after some time has passed.
You can use the Ansoff Matrix as a strategic framework to understand what growthstrategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growthstrategy can be derived from whether the market is new or existing, and whether the product is new or existing.
The business model canvas is a framework proposed by Alexander Osterwalder and Yves Pigneur in Busines Model Generation enabling the design of business models through nine building blocks comprising: key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.
The lean startup canvas is an adaptation by Ash Maurya of the business model canvas by Alexander Osterwalder, which adds a layer that focuses on problems, solutions, key metrics, unfair advantage based, and a unique value proposition. Thus, starting from mastering the problem rather than the solution.
The Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is valueinnovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.
First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is valueinnovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.
A gap analysis helps an organization assess its alignment with strategic objectives to determine whether the current execution is in line with the company’s mission and long-term vision. Gap analyses then help reach a target performance by assisting organizations to use their resources better. A good gap analysis is a powerful tool to improve execution.
The GE McKinsey Matrix was developed in the 1970s after General Electric asked its consultant McKinsey to develop a portfolio management model. This matrix is a strategy tool that provides guidance on how a corporation should prioritize its investments among its business units, leading to three possible scenarios: invest, protect, harvest, and divest.
The McKinsey 7-S Model was developed in the late 1970s by Robert Waterman and Thomas Peters, who were consultants at McKinsey & Company. Waterman and Peters created seven key internal elements that inform a business of how well positioned it is to achieve its goals, based on three hard elements and four soft elements.
McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.
The McKinsey Horizon Model helps a business focus on innovation and growth. The model is a strategy framework divided into three broad categories, otherwise known as horizons. Thus, the framework is sometimes referred to as McKinsey’s Three Horizons of Growth.
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces.
According to Michael Porter, a competitive advantage, in a given industry could be pursued in two key ways: low cost (cost leadership), or differentiation. A third generic strategy is focus. According to Porter a failure to do so would end up stuck in the middle scenario, where the company will not retain a long-term competitive advantage.
In his 1985 book Competitive Advantage, Porter explains that a value chain is a collection of processes that a company performs to create value for its consumers. As a result, he asserts that value chain analysis is directly linked to competitive advantage. Porter’s Value Chain Model is a strategic management tool developed by Harvard Business School professor Michael Porter. The tool analyses a company’s value chain – defined as the combination of processes that the company uses to make money.
Porter’s Diamond Model is a diamond-shaped framework that explains why specific industries in a nation become internationally competitive while those in other nations do not. The model was first published in Michael Porter’s 1990 book The Competitive Advantage of Nations. This framework looks at the firm strategy, structure/rivalry, factor conditions, demand conditions, related and supporting industries.
A SWOT Analysis is a framework used for evaluating the business‘s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts at better strategic decision making by avoiding two pitfalls: underprediction, and overprediction.
The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.
A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
