There are two types of plans. Strategic planning is the process of developing a mission and long-range objectives and determining in advance how they will be accomplished. Operational planning is the process of setting short-range objectives and determining in advance how they will be accomplished. Differences between strategic planning and operational planning are primarily the time frame and management level involved.

Long term generally means that it will take longer than one year to achieve the objective. Strategic plans are commonly developed for five years and reviewed and revised every year so that a five-year plan is always in place. A strategy is a plan for pursuing a mission and achieving objectives. Strategic thinking is important, as it was ranked fifth as a skill that employers value.

Strategic and operational types of plans include three planning levels: corporate, business, and functional. Each of these levels of planning requires strategies, which should be stated simply. A corporate strategy is the strategic plan for managing multiple lines of business. In essence, there is more than one business within the corporation. A business strategy is the strategic plan for managing one line of business. A functional strategy is the operational plan for managing one area of a business.