A Review and Typology of Circular Economy Business Model Patterns

Abstract

Summary The circular economy (CE) requires companies to rethink their supply chains and business models. Several frameworks found in the academic and practitioner literature propose circular economy business models (CEBMs) to redefine how companies create value while adhering to CE principles. A review of these frameworks shows that some models are frequently discussed, some are framework specific, and some use a different wording to refer to similar CEBMs, pointing to the need to consolidate the current state of the art. We conduct a morphological analysis of 26 current CEBMs from the literature, which includes defining their major business model dimensions and identifying the specific characteristics of these dimensions. Based on this analysis, we identify a broad range of business model design options and propose six major CEBM patterns with the potential to support the closing of resource flows: repair and maintenance; reuse and redistribution; refurbishment and remanufacturing; recycling; cascading and repurposing; and organic feedstock business model patterns. We also discuss different design strategies to support the development of these CEBMs.

Biomimetic Organisations: A Management Model that Learns from Nature

“…The problem is that our economy carries out a linear transformation, while that of nature is cyclical. To try to prevent the current economic system from persisting in the linear model, the Circular Economy advocates a circular system based on the following three key principles: preserve and improve natural capital, controlling finite stocks and balancing the flows of renewable resources; optimise the use of resources; and reveal and eliminating negative externalities [32,33].…”

The role of business models for sustainable consumption: A pattern approach

“…The next section will discuss major strategies for sustainable production and consumption and introduce sustainable business model (SBM) patterns as a way of supporting these strategies within the framework of SSC. Building on our prior work in this domain (Froese, 2017;Lüdeke-Freund et al, 2018a;2018b;2019a;2019b;Schaltegger et al, 2012;, the authors of this chapter will discuss the link between business models and SSC and introduce a framework focusing on sustainability strategies and SBM patterns. Finally, we will introduce some new…”

“…Yet even today, truly convincing examples are still rare. Consistency goes beyond improved product and production design and requires consonant solutions along the entire life cycle of a product and the corresponding consumption processes (see Figure 6.2), including customer education and take-back services (Belz and Peattie, 2013;Lüdeke-Freund et al, 2018b). In fact, taking the idea of consistency seriously implies thinking about future generations of products and services, too.…”

“…To support business model designers, an increasing number of tools is already available (see the review in Breuer et al, 2018). The aforementioned 45 SBM patterns can already be used online, together with an additional set of 25 patterns for circular economy business models (Lüdeke-Freund et al, 2018a;2018b;Smart Business Modeler, 2019).…”

Taking the circular economy and the Journal of Industrial Ecology to the next level

“…The study finds that 7.4 billion metric tons of resources were used in the countries of the European Union in 2014, of which less than a tenth (0.7 billion tons) came from re‐ and downcycling. Lüdeke‐Freund and colleagues () grapple with the proliferation of circular economy business models by carefully assessing their form and characteristics to identify business model design options. And, last but not least, Schroeder and colleagues () connect the CE to what is perhaps the broadest set of concerns, carefully examining the extent to which CE strategies align with the UN's sustainable development goals (SDGs).…”