o 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 business's relative product quality, market share, price, and direct cost.
o 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.
In over 100 published studies, the PIMS database has been used to establish relationships between a variety of strategic and market environment dimensions that might influence various measures of performance, e.g., ROI and cash flow.
By means of a multi-industry, multiple regression models, SPI has related profitability to 28 associative variables or "profit-influencing" factors and explained over 70 percent of the cross-sectional variance in ROI.
"Universal laws of the marketplace" are used to explain why a business is under performing its "expected" ROI. A similar model has been developed that explains 70 percent of the variation in cash flow among these businesses in the terms of 19 "cash-flow-influencing" factors.
After the first PIMS research results were reported publicly in the mid-1970s, some writers and managers reacted by acting as if universal laws of strategy had been discovered.
Those closely associated with PIMS warn against over simplification, they did stress that there were principles that could help managers understand and predict how strategic choices and market conditions would affect business performance.
Although they believe that some of these principles apply to virtually all kinds of businesses, others apply only to specific types of businesses or under certain conditions.