# Measuring / Calculating the Five Forces of Porter?

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Mrinal Ghosh

Measuring / Calculating the Five Forces of Porter?

Hi, can somebody help me how to calculate the co-efficients for each of the five forces. I understand all of the 5 forces might not be having the same weight. Also it would differ by industry.

Rating

 2
Agustin Cosso Leskovar
Student (University), Argentina

Calculating the Forces

In order for this analysis tool to be effective, you may want to consider a few aspects:
A) In order to solve any optimization problem you need to apply the right formula m(x;y;z;... n)
B) This method stands for a non-numeric type of analysis. It is very hard to determine, whether a co-efficient would be effective or not. Yet, a few of them may be calculated. I'm not quite certain about them, but for example:
Competitors: it would be interesting to know how many competitors exist in the whole market. By knowing this amount, you may decide which style of scale economy you need. If there are only 2 rivals in the same market, you may choose a Stackelberg model, by simply defining your price as a leader, hence: P = a - b [q1+r2(q1)]; where r2 stands for the reaction.

 1
Anil Kshatriya
Professor, India

Calculating Porter's 5 Forces

Porter's five force model is more of a tool to understand factors that affect competition. It is ord... Sign up

 0
Mrinal Ghosh

@ Anil Kshatriya

Hi Anil, why do you feel that they are ordinal in nature and not cardinal. I see a similarity betwee... Sign up

 0
Anil Kshatriya
Professor, India

@Mrinal

Why not. It can be extended to logic of the GE Matrix. I only have one apprehension that we might ge... Sign up

 2
Mrinal Ghosh

Sub Parameters

With due regards, though it is a mixed game, I guess the coefficients can be calculated by consideri... Sign up

 2
Jagdish B Acharya
Consultant, India

Hurdles Too Strong to Calculate

Though we like the idea of calculation, everything cannot be calculated, because: 1. The company is... Sign up

 1
Agustin Cosso Leskovar
Student (University), Argentina

Sub Parameters

Mrinal, I have made some research in my math books here at home. I think there is a way to determine... Sign up

 2
Mrinal Ghosh

Historical Data

Yes, also we can have a look at the historical data to analyse how the markets have behaved in these... Sign up

 2
H D SHARMA
Professor, India

Calculating the Magnitude of the Five Forces Quasi Quantitively

Hi the group! The idea is fascinating but we must remember that the numbers so estimated or generate... Sign up

 0
Agustin Cosso Leskovar
Student (University), Argentina

Garman-Kohlgane

HD Sharma, with the GK formula you shouldn't have to do any qualitatively interpretation, you just h... Sign up

 1
Umesh
Project Manager, Sultanate of Oman

Many Variables

When variables are many, analysis becomes complicated, even when data is available. So 5 force analy... Sign up

 2
Hans Joergen Pedersen, Denmark

The Model is Non-numerical in Nature

Until I come across a very advanced micro econometric model (i.e. a book on the subject), I take the... Sign up

 1
ACCOUNTANT, Mexico

Five Fources Measures

In my personal point of view, I think it should be fantastic to use algorithms and formulas to predi... Sign up

 2
Parvez
Manager, Mauritius

Calulating Forces by Social Engineering

I believe these statistical tools are important but we should favor social engineering also (finding... Sign up

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