Celtic are planning their compulsory summer refurbishment after being removed from the Champions League at the last-16 stage for the second successive season. But the evidence presented by 180 minutes against Barcelona is that Gordon Strachan, the manager, and Peter Lawwell, the club's chief executive, will have their work cut out if they want to take Celtic to the next level.

Lawwell spoke yesterday about the progress made at Celtic Park, but, arguably, the club have not wrought improvement this season. Strachan has a right to be satisfied with his success at the club since arriving in June 2005, but no one can be blind to the frailties that have afflicted Celtic.

Parts of the playing jigsaw have not worked out. Massimo Donati, for one, was removed at half-time during the 1-0 defeat at the Nou Camp on Tuesday, as much in anger as frustration by Strachan, and the Italian stands as a symbol of the waywardness of the team. Donati has not improved Celtic, certainly not in ways that could justify his £3million transfer fee.

Celtic, like Rangers, remain mired in the peculiar dilemma of the Scottish game - both are big clubs, of vast social and financial potential, who cannot escape their moorings. If Celtic were to spend £15million on players this summer, it would represent a heady splurge of cash yet would be peanuts compared with what their Champions League opponents spend.

This, it seemed, was the subtext of Lawwell's comments yesterday after the 4-2 aggregate defeat by Barcelona. “It is a fantastic achievement to get into the Champions League three years running when you put into context the gulf in finance and the gulf in resources,” he said. “We operate at our level of the transfer market and that is the Scottish club level. We believe we have the flexibility and the financial platform in which to maintain a good quality of player at the club.

“We enjoyed the occasion in the Nou Camp, but we are bitterly disappointed and now we must push on, and I believe we can push on. We must keep our good players and bring in better quality players to supplement what we already have. Like Gordon, I'm very optimistic of doing that.”

Progress is a slippery concept for Celtic: how to achieve it and with whom? To reach the last eight of the Champions League requires signing a player such as Eidur Gudjohnsen, a Barcelona squad player, yet such a move would require at least a £7million transfer fee. It seems that Celtic will have to seek other avenues of improvement.

“We are investing heavily in scouting and we are the best in sports science, trying to make our players better,” Lawwell said. “You have seen that with Aiden McGeady [the Celtic winger] this season. We try to keep an edge elsewhere. If the right deal comes along, we have a wage structure that will allow us to get a top player. We can't compete with Barcelona or Manchester United or Chelsea in the transfer market, but we will operate at our level and hope that through time we can get our edge through other methods.

“There are a lot of options and we plan ahead. We have developed a track record of doing that. John Park [the football development manager] is keeping the manager up with lots of options. We are 100 per cent behind Gordon Strachan and together we believe there isn't a glass ceiling.”

This season's European run appears to have whetted Strachan's appetite. Some believe that a three or four-year stint is as long as the Celtic manager would want at the helm - Strachan has even hinted at this himself - and he is in his third season at Celtic Park.

Lawwell, however, sees no imminent divorce. “Gordon is as hungry as ever and wants to take us forward,” he said. “He is connected with the club and understands what it means to be involved with Celtic.”