The Difference Between a Business Case and a Business Plan
Question: "People in my department occasionally advocate that we do a business case or business plan but I am not sure we are all clear on what this means. What is the difference between a business case and business plan and what are they used for?"
Answer: A Business Case is an examination of a potential market opportunity at the product level. Market opportunity is defined as a "lucrative, lasting, and sizable market problem."
In lay terms, a business case is an assessment done at the product level that culminates in a Go/No-Go decision on whether a company should attempt to solve a market problem by producing a product that will (presently or possibly eventually) compete with other products in the market. For example, should our company build a new mobile phone named SuperPhone that will compete with other mobile phones in the mobile handset for consumers market? This type of question beckons performing a business case.
A Business Plan is an examination of a potential business opportunity at the company level. Business opportunity is defined as a "void in the industry that can be entrepreneurially filled by creating a company that will provide products to the target market."
Therefore, a business plan is an assessment done at the company level that culminates in a Go/No-Go decision on whether we should create a company that will (presently or possibly eventually) compete with other companies in a particular industry. For example, should we create a new airline company called LuxFly that would compete with other airlines in the commercial travel industry? This type of question beckons performing a business plan.
Business plans are primarily used for business opportunity assessment but they can also be supplemented with additional information and be used as a marketing tool to raise capital, for investment in the company, or as an executive management tool to strategically guide and run the company.