Business model innovation for circular economy: An exploratory case study approachJudith Ehmann

1. Juni 2018

The circular economy concept is discussed as a promising solution to overcome growing resource use as well as increasing waste streams and pollution. In a circular economy, "waste" does not exist, but resources are reused and recycled to circulate safely within technical and biological cycles. Regarding business, one major building block towards a circular economy is the development and implementation of new business models that innovatively translate the circular economy principles into new logics for value creation. This exploratory case study examines prerequisites for circular economy business model innovation (CEBMI) on a business model level and on an organizational level, based on the examination of two best practice firms. The business model analysis reveals that the firms can overcome barriers to CEBMI to a certain extent because the value proposition of their business models fits their conventional customer segments as well as new customer groups, such as sustainability-oriented customers. However, the findings also reveal that to really “close the loop” and scale up circular economy business models, customer behavior change is inevitable. On an organizational level, the findings of this thesis show that firms, intending to engage in CEBMI, are enabled by four interrelated dynamic capabilities constituting essential organizational foundations for CEBMI: shared vision; openness to the external environment; holistic thinking; and openness to alternative solutions.