Business models for the circular economy: Opportunities and challenges

Fraccascia, Luca; Giannoccaro, Ilaria; Agarwal, Abhishek; Hansen, Erik G.

doi:10.1002/bse.2285

Cited by 30 publications

(24 citation statements)

References 23 publications

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“…However, the existing literature has not explained, in depth, how companies design their business model according to circular economy principles. There is fertile ground for additional and systematic research at the intersection between circular economy and the strategic management field, which calls for scholars to deepen the role of circular economy for companies' business model design (Fraccascia, Giannoccaro, Agarwal, & Hansen, ; Lüdeke‐Freund et al, 2018; Perey, Benn, Agarwal, & Edwards, ).…”

Section: Introductionmentioning

confidence: 99%

Designing business models in circular economy: A systematic literature review and research agenda

et al. 2020

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The concept of circular economy is increasingly receiving attention in different domains, including strategic management, operations management, and technology management. It requires companies to design their business model (i.e., the value network, the relationships with the supply chain partners, and the value propositions towards customers) around a new concept of sustainable development that reduces consumption of natural resources and preserves the environment. However, extant research falls short in terms of explaining how companies design their business model according to the circular economy principles. Starting from this premise, the present paper provides a systematic review of the literature on the design of business models in the context of circular economy, aiming to offer an overview of the state of research and outline a promising research agenda.

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Section: Introductionmentioning

confidence: 99%

Designing business models in circular economy: A systematic literature review and research agenda

et al. 2020

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“…BMI that addresses environmental and social challenges is being addressed under two main headings: sustainable business models (e.g., Bocken et al, 2014;Schaltegger et al, 2016) and circular business models (see Ferasso et al, 2020, for a review;Murray et al, 2017). In this paper, and in line with the context of this special issue (Fraccascia et al, 2019), we focus on the subset of circular business models. A circular business model contrasts with a linear business model, in which value creation is based on a virgin material flow that is manufactured, consumed and deposited as 'waste' (Perey et al, 2018).…”

Section: Circular Bmi: Types and Business Model Componentsmentioning

confidence: 99%

How can firms access bank finance for circular business model innovation?

2021

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Access to bank finance has emerged as a key challenge for firms engaged in circular business model innovation (circular BMI), both in practice and in the academic literature. Through interviews, focus groups and archival documents, we document the experience of firms accessing finance for circular BMI and assess bank willingness to lend to firms that engage in circular BMI. Our findings offer potential strategies for firms who look for external (bank) finance to realise circular BMI. Using a case studybased theory-refining approach, we identify three core strategies that firms can use to obtain bank finance for circular BMI. First, firms can signal future cash flow expectations by aiming to secure customer contracts and preorders. Second, relationship building with banks, suppliers and customers improves the banks' risk perception of firms. Third, firms can design standardised, long-lasting circular assets that can serve as bank collateral, especially once secondary markets develop, overcoming the difficulty of lending based on innovative, firm-specific assets.

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“…It should be borne in mind that there is no general consensus about the circular economy at an industrial level [6,[27][28][29] and that there are substantial differences in the controls that should be applied in the circular economy [21,23]. In particular, there are various conceptual studies and a lack of business case studies that address the circular economy on a practical level, to provide insights on production processes, materials used and of the challenges inherent in the circular economy in companies [30][31][32], such as case studies of companies concerned with metal recycling.…”

Section: Literature Reviewmentioning

confidence: 99%

Recycling Technology Innovation as a Source of Competitive Advantage: The Sustainable and Circular Business Model of a Bicentennial Company

et al. 2021

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La Farga Yourcoppersolutions is a bicentennial Catalan company that manufactures semi-finished copper products. As copper is a 100% recyclable material, much of the sector’s production comes from secondary copper, scrap, not from mined copper. In the case of La Farga, not only a good part of its output comes from recycled copper, but it is also a world leader in copper-recycling technology. The objective of the paper is to describe La Farga’s business model from the point of view of sustainability and the circular economy. What have been the causes and effects of recycling on the business model? Regarding the methodology, the work follows the research strategy of the case study. Both qualitative and quantitative data were collected from a variety of primary and secondary sources. Economic, social and environmental sustainability of the firm was assessed through financial and non-financial indicators; value-added generation and distribution were calculated from accounting data; and the circular business model was analysed via a thematic analysis: its components, innovation, enablers and barriers. Results show that the presence of barriers forces the implementation of circularity to be gradual and to combine linear and circular models to maintain competitiveness.

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Business models for the circular economy: Opportunities and challenges

Cited by 30 publications

References 23 publications

Designing business models in circular economy: A systematic literature review and research agenda

Designing business models in circular economy: A systematic literature review and research agenda

How can firms access bank finance for circular business model innovation?

Recycling Technology Innovation as a Source of Competitive Advantage: The Sustainable and Circular Business Model of a Bicentennial Company

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