Pims Principles (Hardcover)

by Robert D. Buzzell (Author) "The central theme of this book is that we can relate business strategies to performance by studying past experience..." (more)
Key Phrases: general strategy principles, portfolio planning systems, superior perceived quality, General Electric, North America, General Motors (more...)

Editorial Reviews

Review
Worth Loomis President, The Dexter Corporation The insights and evidence offered by Buzzell and Gale are invaluable for companies that are restructuring to maintain their vitality and market competitiveness. In contrast to other books, The PIMS Principles contains empirical data that show the strategic reasons why winning businesses win and losers lose. -- Review

Product Description

Since 1972 the PIMS (Profit Impact of Market Strategy) Program, working with an extraordinary data base of 450 companies and 3,000 business units, has developed a set of principles for business strategy so effective and consistent that they must now be considered part of the basic education of managers in a free-enterprise system. In this important new book, authors Buzzell and Gale summarize and explain PIMS methodology and applications in by far the most comprehensive and penetrating look at PIMS yet published, to help managers understand and predict how strategic choices and market conditions will affect business performance.

The use of PIMS to explore the general relationship between strategy and performance is accepted worldwide as a proven method to produce greater effectiveness for individual firms and the economy as a whole. Taking into account three kinds of information -- market conditions, competitive position, and financial and operating performance -- PIMS rejects the notion that there are "formulas" for management decision-making or that "easy wins" can be had by applying general rules to specific problems. Instead, the PIMS approach is based on studies of the actual experiences of businesses that have been documented in a unique data base. The principles drawn from this data base provide a solid foundation for the situation-specific analysis that managers must perform to arrive at good decisions.

Unlike Portfolio Planning methods, PIMS explores many possible dimensions of strategy and market environment, such as investment intensity, product or service quality, labor productivity, and vertical integration, all of which have powerful effects on business performance. For example, PIMS shows how the quality edge boosts performance two ways and earns superior profit margins. It verifies how market share and profitability are strongly related but also shows why that does not mean that every business can or should strive to increase its share, as demonstrated by the disastrous "kamikaze attack" launched in the early 1980s by Yamaha on the market leader Honda. Most important, it analyzes why forecasts of cash flow based solely on the growth-share matrix are often misleading and why, in fact, many so-called "dog" and "question mark" businesses actually generate cash, while many "cash cows" are dry.

Finally, Buzzell and Gale discuss the PIMS measure of "long-term value enhancement," which has been applied to more than 600 businesses in the PIMS data base over seven or more years, to uncover any conflicts between maximizing current profitability and building long-term values. Whether it's looking at market leaders or followers, picking profitable markets, or developing well-positioned business clusters whose synergy creates advantages for lasting shareholder value, PIMS is made simple and understandable in this incisive, comprehensive volume that is an invaluable addition to every personal and business library.

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Product Details

• Hardcover: 322 pages
• Publisher: Free Press; illustrated edition edition (August 10, 1987)
• Language: English
• ISBN-10: 0029044308
• ISBN-13: 978-0029044308
• Product Dimensions: 9.5 x 6.5 x 1.1 inches
• Shipping Weight: 1.2 pounds
• Average Customer Review: 4.2 out of 5 stars See all reviews (4 customer reviews)
• Amazon.com Sales Rank: #938,741 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

10 of 12 people found the following review helpful:

5.0 out of 5 stars The foundation for any strategic thinking excercise, July 15, 1998

By	Wiliam J. Hass (Northbrook, Illinois USA) - See all my reviews (REAL NAME)

No strategist should be without The PIMS Principles in their library. I have used it in numerous consulting engagements and found it to be a source of wisdom that trancends the current management fad-of-the-day. PIMS Principles explains all of the recent fads typical of the corporate boardroom in a logical, empirical way. Topics that every strategist should balance but don't include relative market share, relative product quality, relative productivity, and investment intensity. Authors of current books on stragegic planning such as Gary Hammel recognize that PIMS put stragegic planning on the map. Even Tom Peters agrees that the PIMS team has created one of the most powerful knowledge bases ever assembled.

I believe The PIMS Principles outlines in a disciplined way the factors needed for any balanced scorecard effort and in fact could be considered the "first balanced scorecard" which was used at General Electric in the 60's and 70's.

General Electri! ! c's success as one of the most diversified and highly successful value creators is and can be attributed to their ability to balance the factors identified in The PIMS Principles.

A must read for anybody really interested in corporate strategy and why fads and simplified approaches rarely work.

5 of 6 people found the following review helpful:

3.0 out of 5 stars Dated Analysis, August 27, 2000

By A Customer

In the 70's when the work was first done, articles appeared in Harvard Business Review and the study then was closely associated with Boston Consulting Group. Much has happened since and the book is just a rewrite of the earlier results. I suggest you get the HBR articles, they cover the material well.

4.0 out of 5 stars Good Research, Even Though It's a Bit Dated, March 20, 2005

By	Walter H. Bock "Wally Bock - Author, Blogger,... (Charlotte NC) - See all my reviews (REAL NAME)

The Profit Impacts of Marketing Strategies (PIMS) Study grew out of a quest for general principles of strategy. The study itself began in 1972 and collected data on over 3,000 business units in 450 corporations for periods ranging from two years to over a decade.

Even twenty years after its original publication, there isn't anything quite like it. Because of the way the material is presented, you can analyze different factors operating to see how they might affect your business. You can look at Picking Profitable Markets or the Impact of Market Position on Profitability or Why Quality is the Premier Driver of Profitability and then relate the principles to your own operation.

You can do this by reading the book all the way through from front to back, or by dipping into the chapters that seem to offer you help for a current problem. If you're I doubt about where to start, let me suggest Why Quality is the Premier Driver of Profitability. It's a chapter I ask my clients to read when we're working on strategy.

A lot of the material in this book is timeless. You'll find data and recommendations that are just as valuable today as when the book was published and that will be valuable ten years from now.

There are problems, though. While some of the research findings may be timeless, the book is still a product of its time. You'll find discussions of "Portfolio Planning" methods, which were in vogue at the time the book was written. You'll find the authors using language and reacting to issues that will sound somewhat dated. Nevertheless, the solid truth and research support that exists in this book makes it worth buying.