PIMS Profit Impact of Market Strategy Analysis

PIMS (Profit Impact of Market Strategy) analysis searches a large, multi-industry database of business units for the general empirical relationships that link strategy and market conditions to profitability. Originating in General Electric's effort to understand why its divisions earned such different returns, the program was opened to outside members and analyzed by Sidney Schoeffler, Robert Buzzell, and Donald Heany, whose 1974 Harvard Business Review article reported that a manageable set of factors -- market share, product quality, investment intensity, and others -- statistically explained much of the variation in return on investment across businesses. Buzzell and Gale's 1987 book The PIMS Principles distilled these findings into empirically grounded 'principles' linking strategy to performance and into the par ROI benchmark, the level of profitability a business should expect given its strategic and market profile. PIMS analysis thus treats strategy as an empirical regularity to be estimated across many businesses rather than reasoned from a single case.