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Profit Impact On Market Strategy (Pims)

The PIMS (Profit Impact on Market Strategy) program was originally a research project between the Marketing Science Institute and Harvard Business School to determine how profit impacts marketing strategy and vice versa. The program collects data on over 3,000 business units from several hundred firms to analyze the influence of competitive position, production structure, and target market attractiveness on profitability. Companies can purchase reports from the PIMS database to examine outcomes of strategies pursued by similar businesses when facing comparable situations. While the model offers guidance for planners, some critics argue that measurements and findings have not always been accurate.

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Mariam Mathen
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587 views1 page

Profit Impact On Market Strategy (Pims)

The PIMS (Profit Impact on Market Strategy) program was originally a research project between the Marketing Science Institute and Harvard Business School to determine how profit impacts marketing strategy and vice versa. The program collects data on over 3,000 business units from several hundred firms to analyze the influence of competitive position, production structure, and target market attractiveness on profitability. Companies can purchase reports from the PIMS database to examine outcomes of strategies pursued by similar businesses when facing comparable situations. While the model offers guidance for planners, some critics argue that measurements and findings have not always been accurate.

Uploaded by

Mariam Mathen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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PROFIT IMPACT ON MARKET STRATEGY (PIMS)

Although PIMS is referred to as a "model" it is actually a "programme" which was originally aresearch
project between the Marketing Science Institute and Harvard Business School, inthe USA, to determine
how profit impacted on marketing strategy and vice versa. Theprogramme, which is still continuing, has
four main areas of strategic planning underinvestigation which can be of use to businesses when they are
selecting strategies:
Forecasting profits
Allocating resources
Measuring performance
Appraising new business propositionsThe main findings of the PIMS programme have been that
profitability is influenced by(a) Competitive position (market share and product quality) ( b)
Pr oduct i on s t r uc t ur e( c) The at t r a ct i venes s of t he t ar get mar ket . The commercial side
of the programme is administered by US Strategic Planning Institute butis also available in other
countries. There is a database of approximately 3,000 business"units" from several hundred firms,
including successful and loss-making ventures. Companyand market backgrounds are recorded as well as
the strategies which were adopted together with the results achieved.The main purpose of this model, or
programme, is to enable companies to look at theoutcomes of strategies pursued by others when they are
faced with similarsituations/conditions. Information is available, at a cost, in reports in one of four
formats:
PAR
average ROI and cash flow based on market technology, cost structure andcompetition
Look-alikes
strategies (and outcomes) used by similar companies
Strategy analysis
shows the likely effects of strategy changes on ROI/cash flow bothshort and long term.
Optimum strategy
suggests strategies which will maximise results

This model offers good "security" for planners but it also has its pitfalls. Critics claim thaterrors have
been made in the measurements taken and that in some cases the findings havebeen misinterpreted.
Relating profitability to market share is also an area which could bedisputed according to Porter's
propositions given above.

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