Circular Business Model Framework: Mapping value creation architectures along the product lifecycle

Abstract

Circular business models are foreseen to contribute to enabling prolonged lifetimes of products and components through successive cycles of reuse, repair, remanufacturing and closing material loops. To realize economic viability and resource efficiency savings from a circular business model, early consideration and integrated planning of the product lifecycle and value creation architectures at the relevant points in the lifecycle is pivotal. However, the current frameworks for business model design have not been designed to recognize the specific opportunity points of the product lifecycle to create and capture additional value from cycling resources. They do not acknowledge that it often takes distinct value creation architectures and value propositions to capitalize on the value creation potential. To attend to this gap, this paper develops a circular business model framework that is based on the current understanding of resource efficiency strategies and systematically integrates lifecycle value management with traditional business model design thinking. Through this, the developed framework is intended to serve as guidance for circular business model development to incorporate circular principles and to capitalize on additional value from cycling resources. To explore the usefulness of the framework developed from literature, a comparative case study design with two cases of Swedish companies operating circular business models is employed. The framework proved useful to map the companies’ distinct value creation architectures that enable cycling of resources and to point to opportunity spaces for additional value creation. Suggestions for further refinement are made. (Less)