The usual copy operation does not make your new hard drive identical to the old one. For example, if you open Finder and copy all files and folders to the new hard drive, macOS will not start from the new hard drive. The Clone disk utility allows you to duplicate all your data and make macOS bootable on your new hard drive. As a result, your new disk becomes an exact clone of your old one.
When you need it:
What drives you can use:
If the destination drive is larger or smaller than the source one, the partitions of the source drive will be proportionally resized on the destination drive to fully occupy its space. The only exception is partitions smaller than 1 GB. Those partitions will not be resized.
It is not necessary that the destination disk is of the same size as the source one, it can be bigger or smaller, but its overall size must be larger than the used space of the source disk plus 10%. For example, you have a 1000 GB hard drive in your Mac, only 200 GB is used. If you want to clone it, the destination drive size must be 200+10%=220 GB, or larger. If your destination drive is too small, try deleting some unnecessary data from the source drive or moving the data to an external drive, USB flash drive, or cloud storage.