The PIMS concept (profit Impact OF Market Strategies) originates from the strategic management.

It is based on a industry-spreading empirical study, which was started 1960 of General Electric as internal project for the determination of success-affecting factors of an enterprise.

A set of environmentalreferred factors and enterprise-referred key factors, which are to be affected from management to, were found by General Electric. 1972 were taken over the project by the Harvard Business School and expanded thus since further enterprises. 1976 were transferred the project to the Strategic Planning of institutes (MIRROR-IMAGE ONES) in Cambridge. Meanwhile approx. 500 enterprises, which are active in approx. 3000 business fields in different industries, at this project participate.

From the quantified characteristics of the participating enterprises the regulation factors relevant for strategic success are empirically identified to their influence on success sizes by application of quantitative methods and like the Return on Investment (ROI) or cash-flow determines.

Some factors correlate particularly strongly with the success sizes ROI and cash-flow:

positive correlation

• relative market share
• relative product quality
• vertical integration

negative correlation

• Investment intensity
• Product diversity

By these factors leave themselves up to 70 per cent - measured as variance - to which differences in profitability between successful and unsuccessful business fields of the PIMS data base explain. Important factors regarded by the PIMS concept (after cock, P. 472):

• Market share
• Product quality (usually from view of the customer)
• Market growth
• Innovation (research and development)
• Productivity (creation of value busy one per)
• Investment intensity
• vertical integration (the creation of value chain is fully

Criticism

• There is not only correlations, causal connections, which are pointed out.
• reduced of the included enterprises
• missing theoretical founding of the methodical proceeding
• Adjustment of the entrepreneurial success mainly at the Return on Investment (ROI)

Literature

• Robert D. Buzzell; Bradley T. Gale: The PIMS program: Strategies and entrepreneurial success. Wiesbaden, 1989, ISBN 3409133437
• Harald Hungenberg: Strategic management in enterprises. Goals - process - procedure, Wiesbaden, 2001, ISBN 3409230637
• Dietger cock, Taylor, B.: Strategic business planning, 8. Aufl., Heidelberg, 1999, ISBN 3790811556
• Heribert Meffert: Marketing management: Analysis, strategy, implementation. Wiesbaden, 1994, ISBN 3409236139

Articles in category "PIMS concept"

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