PIMS is an effort to examine the profit performance of different marketing strategies. It seeks to quantify the behavior of factors that influence business performance.
PIMS started as an internal project at General Electric (GE) in 1960 to explain and predict operating performance, eventually the PIMS effort led to a regression model that explained a substantial variation in return on investment (ROI).
Development of the PIMS model continued at GE, then at Harvard Business School and the Marketing Science Institute. At these latter institutions, the PIMS database was expanded to include other corporations.
In 1975, the Strategic Planning Institute (SPI) of Cambridge, Massachusetts, a nonprofit corporation governed by the member companies, was formed to manage the PIMS project.
- The PIMS database now includes financial and strategic information for approximately 3,000 business units operated by some 450 corporations, primarily in North America and Europe, for periods that range from two to twelve years.
- Each PIMS "business" is defined as a division, product line, or other profit center within its parent company, selling a distinct set of products or services to an identifiable group of customers in competition with a well-defined set of companies.
- For each business, separate data are collected on revenues, operating costs, investments, and strategic plans.
- SPI collects PIMS data not only on traditional balance sheets and income statements but also on each businesses' relative product quality, market share, price, and direct cost.
- The database describes more than 200 characteristics for each business and in addition documents its actions, the market it serves, its competitive environment, and its financial results.
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