A Framework for Sustainable Circular Business Model Innovation

A Definition and Theoretical Review of the Circular Economy, Value Creation, and Sustainable Business Models: Where Are We Now and Where Should Research Move in the Future?

“…However, for large manufacturing firms transformation towards circular business model requires significant changes and costs. This is because of the need to introduce radical innovations and disruptive business models to tackle current challenges and move toward the circular economy [7]. Several giant companies are in the process of switching their business models from linear to circular.…”

“…For example, H&M plans to rely 100% on recycled or other sustainably sourced materials to produce its garments, Coca Cola and Carlsberg are innovating by designing recyclable packaging materials for their products, DELL is initiating a large-scale computer equipment recycling and refurbishing program, and Phillips is shifting from selling lighting equipment as a product to selling lighting equipment as a service to retain product ownership and control. However, such transformations rely on system-wide innovations, so they can only be realized in conjunction with complementary innovations [7]. For example, for H&M to achieve its goal of closing the material loop in the fashion industry, it has to initiate within-and cross-industry collaborative actions.…”

“…This idea has resulted in research into ways management can expand and rethink the traditional make-use-dispose business model [1,2]. Despite criticism of this view and debate over whether it is realistic to expect companies to venture beyond shareholders' interests when designing their business models to close resource loops and achieve the complete cycling of materials [3][4][5][6], an increasing number of scholars and practitioners are hopeful that such a transition can address what is perhaps the greatest challenge currently facing society [7,8]. Recently, discussions about the importance of the circular economy have evolved.…”

“…A review of the literature reveals that few strategy, organization, or management scholars have employed the concept of the circular economy. These scholars have focused on describing different circular business models, circular business model innovations [18], and certain challenges and uncertainties that companies encounter when they adapt to the circular economy [3,7,19,20]. Also, research on related concepts, such as product-service systems [21][22][23][24], eco-efficient services [25][26][27], and business model sustainability [28,29], has discussed the business practice implications of the circular economy.…”

Archetypical CBMs in Construction and a Translation to Industrialized Manufacture

“…The definition in this paper for circular business models is based on two other papers. A CBM can be defined as the rationale of how an organization creates, delivers, and captures value to close and slow material loops [24,25]. "These CBMs are by nature networked: they require collaboration, communication, and coordination within complex networks of interdependent but independent actors/stakeholders" [24].…”