A Study on Assessing a Business Viability for Transition to a Circular Economy

Abstract

The shift from the existing linear model of the economy to a circular model is gaining traction across business entities, nationally and globally. Minimal studies have been done that would support the circular transition for a business from an existing linear model. There is a significant gap between the formulation and implementation of circular strategies in business. This literature review explores the preexisting concepts of the business model canvas (BMC) and Value Hill tool for the implementation of circular strategies in a business by determining a Good Point for Transition (GPT). The favorable condition, where a business can transition from a linear economy (LE) to a circular economy (CE) is defined as a GPT. This study suggests a three-step generic process that would provide a company with clarity on how to incorporate circular strategies into their structure. Firstly, this review paper defines and elaborates upon the business model canvas (BMC) based on the prior work of Osterwalder and Pigneur (2010) and Lewandowski (2016). Secondly, it analyzes the Value Hill diagram, a strategic tool for circular activities, that a business can use upon implementation of a circular model (Achterberg et al., 2016). Finally, this work will indicate how a circular strategy can be selected on the basis of assessment of the BMC and Value Hill diagram of a business. For a better understanding of the process, IKEA's initiatives for circular strategies are used in the study. The paper concludes with a three-step generic model for determining GPT and emphasizes that the adoption of circular strategies for companies depends upon the circular expertise and resources they and their value chain partners have across the Value Hill diagram. Keywords: circular economy, circular strategies, circular business model canvas, value hill diagram, circular transitions

Development in the Circular Economy Concept: Systematic Review in Context of an Umbrella Framework

“…Primc et al [144] studied the factors to make CE implementation more robust across various evolution stages of an organization; the study developed thirteen circular economy configuration indicators, ten for the innovative and three for the conservative stage of the organizational life cycle. Upadhayay and Alqassimi (2020) [145] borrowed the pre-existing concept of a business model canvas of Osterwalder and Pigneur (2010 [146]) and the value hill diagram Achterberg et al [103] to define a good point for transition (GPT) from a LE to a CE for a business.…”

“…• When it comes to the transition from the LE to the CE, the assessment of the available circular resources should be carried out, and circular strategies should be crafted depending on the circular expertise, resources, knowledge, and skills. Companies could focus on circular design (uphill strategies), resource life cycle extension strategies (top hill), or value retention (downhill), or all of them depending on the expertise they have [101,145]. For example, a company focusing on uphill strategies are more into circular product designs, modular product design, ethical extraction, and the procurement of resources; a company emphasizing top hill strategies focuses on RLES like performance economy, servitization, sharing economy, digitalization, and bringing products/components back into P&C cycle, and a company prioritizing downhill strategies focuses on EOL strategies like refurbishing, remanufacturing, and recycling.…”

Ecological and Economic Assessment of the Reuse of Steel Halls in Terms of LCA

“…Obviously, we can always ask a question whether the demolition of materials and their use will be the trend of the future [19]? However, an increasingly faster transition from a linear economy (LE) [20] with high waste to a circular economy (CE) [21] based on the reuse of materials and recycling [22] is to be expected. Creating a market for building elements with different actors (such as traders, investors, designers, contractors) can prove to be a key solution for multiplying the reuse of these building elements and reducing the environmental pressure of the construction sector [23].…”