Abstract
To aid companies in transitioning towards a circular economy and adopting strategies such as reuse, repair, and remanufacturing, the concept of circular business models has been developed. Although the concept draws on contributions from various academic disciplines, and despite its increasingly frequent use, few scholars clearly define what a circular business model is. Understanding about what makes a business model circular is diverse, hampering the theoretical development and practical application of circular business models. This study aims to help frame the field of circular business model research, by clarifying the fundamentals of the concept from the perspectives of resource efficiency and business model innovation. Expanding on these findings, a review of how the concept is used in recent academic literature is provided. It shows that a coherent view is lacking on which resource efficiency strategies classify a business model as circular. This study clarifies which resource efficiency strategies can be deemed as relevant key strategies for circular business models, and suggests a new definition of the concept. With the definition grounded in analysis of the fundamentals in terms of resource efficiency and business models, the study contributes to theoretical advancement and effective implementation of circular business models.
Highlights
To improve resource productivity and efficiency of our society, the concept of a circular economy has recently been revived [1,2]
This study aims to help frame the field of circular business model research, by clarifying the fundamentals of the concept from the perspectives of resource efficiency and business model innovation
With the definition grounded in analysis of the fundamentals in terms of resource efficiency and business models, the study contributes to theoretical advancement and effective implementation of circular business models
Summary
To improve resource productivity and efficiency of our society, the concept of a circular economy has recently been revived [1,2]. The study aims to systematise current knowledge regarding the circular business model concept, including the main considerations behind securing the potential resource efficiency gains when implementing circular strategies. Through this three-fold analysis, a definition of the circular business model concept is proposed. The research design and the methodology is presented This is followed by a literature analysis (Sections 3–5), including an overview of the fundamentals of the circular business model concept (Section 3), how it is currently used (Section 4), and the main contingencies that can impede resource efficiency gains from circular strategies (Section 5). The final section (Section 7) includes the discussion and final remarks
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