It would be more a physical than a mathematical model.

If you could quantify the forces they would be expressed as a stress to the system - the stronger these forces, the higher the stress and the bigger the chance for your business (model) to break.

Challenges are:

QUANTIFY the forces.

Benefits - youi could then generate stress profiles to compare

- companies

- market environments

- business models etc.

Powerful.

What do you need it for ?

Thanks by answer, it's proposal to start a Doctoral Thesis in strategic planning area.

I've used subjective, Delphi approach successfully for scoring and even weighting forces. Difficult really to quantify mathenatically.

Hi Amir:

The idea to translate the five-forces into a general mathematical model runs counter to the very idea Porter had when he wrote his book. Porter’s five forces framework is a heuristic (not a model) that helps to structure the process of an industry analysis. With a model you would create a limited, but rigorously determined set of variables whose interactions are investigated in-depth. Frameworks as an alternative attempt to capture much more complexity of industry competition. As Porter (1991: 98) writes: “Frameworks identify the relevant variables and the questions which the user must answer in order to develop conclusions tailored to a particular industry or company.” As such, frameworks or technological heuristics attempts to blend scientific knowledge with the practical and context-specific knowledge of practitioners.

In Porter’s SMJ article Towards a Dynamic Theory of Strategy he discusses this issue under the heading approaches to theory building and distinguishes a model versus a framework-based approach. I would suggest having a closer look at this paper.

I hope it helps.

Best wishes

Markus

Markus, I appreciate the time and depth of your response, I will read the article you mention. regards

Hi Amir, 

After an empiric approach it will eable to calculated by Structural Model Equations (SME) into my field of research in Agricultural Sciences i was looking for references, wich they can show lantent variables and observable to the empiric approach to the Portear's Five force

Michael Porter's interview from 2008 may be beneficial.  See attached link.

http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1

Amir,

First, good luck.

Second, there is actually a strong incentive to quantify intrinsic and extrinsic forces. I am talking from the standpoint of a shareholder. Take a simple approach to valuation of equity (DCF or EVA), simulate prices based on input (Noplat margin, ROIC, growth, ... and unlevered beta), you will notice that, in many cases, the unlevered beta explains the majority of variation in intrinsic value. Clearly, any attempt to adjust the unlevered beta estimate with a metric of competitive advantage relative to peers, would yield a more calibrated intrinsic value. In short, Amir, I find it worthwhile to work on bridging qualitative strategic observations into metrics, and embedding these metrics into a risk model.