Profit Impact of Market Strategy (PIMS®) is a project that uses empirical data to determine which business choices make the difference between success and failure. PIMS® is used to develop strategies for resource allocation and marketing. Obviously one of the most surprising findings is that the same factors work in the same way across different industries, countries and decades, which makes it ideal for strategic benchmarking. PIMS® “yields solid evidence in support of both common sense and counterintuitive principles for gaining and sustaining competitive advantage” Tom Peters and Nancy Austin.
The project was originally initiated by senior managers of General Electric. They wanted to know why their strategy of investing in “large, growing and profitable markets” had resulted in multibillion dollar losses in the IT market. Under the direction of Sidney Schoeffler, an Economics Professor hired by GE for the purpose, the PIMS® project was launched in the 1960s as an internal empirical study. The aim was to see what could be learnt by comparing across GE’s large and diverse portfolio of strategic business units (strategic benchmarking).
Since GE was highly diversified at the time, key factors were sought that would have an impact on economic success regardless of the product. ROI (the profit per unit of tied capital) was used as the measure of success. In 1972 the project was transferred to the Marketing Sciences Institute (then under the wing of Harvard Business School) which extended it to other companies. Following various buyouts, it is now part of Malik Management in St Gallen, Switzerland.
We would be delighted to meet with a leadership team to give an overview of the PIMS® Strategic Benchmarking software and to explore how you might structure your SBU definitions to best benefit from participation.