The PIMS study lends predictability to strategic decision making. It relies on ROI as a key criterion of strategy choices. The most important aspect of the model is the variables it uses in analysing the impact on profitability of strategic decisions. The nature and number of variables used in the analysis is an on-going development. They can be broadly divided into 2 types: Market related variables and non-market related variables (1).
Market related variables include aspects such as market share, relative market share, pricing, product quality etc. Non-market variables include factors such as R&D expenditures, investment intensity, technological development, labour productivity (2).
Some of the key findings of PIMS are that High market share leads to high profitability. This has been the most studied finding of the PIMS project and has been confirmed in subsequent studies (3).