Circular Strategies in the Swedish Furniture Industry – A Business Modelling Approach

Circular entrepreneurship is becoming a new, promising reality, in the manner of needed radical paradigmatic change in the era of Anthropocene. Circular entrepreneurs intend to create social and environmental value while they build financially viable businesses. They are embedded in multiple institutionalised value systems that they are expected to adhere to. Those institutionalised systems provide circular entrepreneurs with different, in many cases, contradictory norms, values and guiding principles. Substantial amount of research has been done to date to examine the impact of institutions on entrepreneurial endeavours. And yet, research lacks sufficient insights into how circular entrepreneurs engage with the institutional structures in designing business models on a financially feasible ground while creating social and environmental value. To address this, this paper investigates how circular entrepreneurs respond to the value systems of surrounding institutions in business modelling and how two fundamental aspects of embeddedness, namely resource integration and value cocreation, are achieved within a circular business model that is coherent in itself and with the entrepreneur's ambitions. Both the institutional context and the institutional logics surrounding entrepreneurs are examined to comprehend the surrounding institutional systems more in-depth and extensively. By analysing a longitudinal in-depth case study, this article aims to develop better insights into circular business modelling and underlying mechanisms of embeddedness. The case is a born-circular small cidermaker in Cornwall (UK), namely Wasted Apple. The findings show that the circular entrepreneur is surrounded by dominant normative institutions forming the principles of business model design. circular entrepreneurs mark fidelity to the institutional norms to obtain a range of microcompetencies and to manage integrated hybrid tensions within the value creation system. And therefore, a circular business model is a more holistic and inclusive structure as compared to a typical conventional linear business model. And yet, paradoxically embeddedness facilitates business survival but hinders strategic business planning as well as business profitability and growth.

Towards digitalization of the circular economy in the furniture industry

Circular Economy (CE) can be promoted and supported by the creation of new and innovative business models which embed CE principles into organisations’ value chains. This paper provides a review of approaches to the circular business model (CBM). We conducted a literature review, including content analysis, and examined publications (51 papers) on circular business models published in English in peerreviewed journals. Our objective was to provide an overview and systematize the stateof-the-art in CE-oriented business model approaches. The following research questions were posed in relation to the objective: Which sub-processes and components are included in the Circular Business Models (CBM)? Which CBM archetypes have already been established? Which strategies and other factors support the creation/ transformation of the CBM? The results of the studies were presented in five areas encompassing the following: 1) development (including the methodologies of development and transformation), value proposition, creation and delivery, 2) CBM archetypes, 3) circular strategies, 4) the determinants of development and transformation of business models for CE. The paper contributes to the improved understanding of circular business models. It consolidates related research by offering an overarching conceptual framework. It also points to the directions of future research.

In the last decade, there has been an active search for opportunities to implement the concept of sustainable development in practice. One of these areas is the formation of a circular economy, which provides for the development of closed-loop cycles of production and consumption based on circular business models. The article discusses the theoretical and practical aspects of using circular business models as managerial innovations in the field of subsoil use. Methodologically, the study rests on the conceptual foundations of business modeling and circular economy. The methods of analysis, synthesis, classification and observation are applied during the research. The work focuses on business model as a managerial innovation that provides a holistic view of entrepreneurial activity and shows its relationships with business processes in a company. The authors highlight the distinguishing features of circular business models, whether these are intra-firm models proposed in the reports of the Ellen MacArthur Foundation and Accenture, or inter-firm ones, which are circular industrial clusters or eco-industrial symbiosis. We develop a conceptual circular business model to be applied in the field of subsoil use, which specifies inter-firm business processes at a mining enterprise and substantiates the existence of direct and reverse symbiotic chains facilitating the exchange of products, services and waste within a circular industrial cluster. The research results demonstrate not only the possibility, but also the need to utilize circular business models in the context of subsoil use. This approach will help generate intra- and inter-firm benefits and thereby enhance the competitiveness of mining enterprises.

Pursuing sustainability implies setting a multitude of open-ended goals to address environmental and socioeconomic issues today as well as those for future generations. The circular economy (CE) paradigm appears more focused regarding goals and agency to address environmental issues by using the economic system. However, companies and governments aiming to operationalize CE in practice, it has been claimed, will face six key challenges limiting the CE “net sustainability impact” potential. This work focuses on the challenges for manufacturers to adopt and operationalize CE for their business. The two key levers for manufacturers to navigate on their path from the linear (take-make-dispose) to a sustainable CE are innovating and designing of the business model and of their products. To date, however, understanding the role of product design in developing circular business models has received little attention in research. This review article builds upon the CE literature foundation, including definitions, challenges, and business modeling frameworks needed to better understand the role of product design. Building on the work of several highly cited CE-centric literature reviews and voices in research and industry, we selected and merged complementing frameworks: Slowing-Closing-Narrowing, Circular Design, and the Circular Business Model Innovation framework. To understand how to put these frameworks into practice, we analyzed CE's links with electric vehicle and white goods research and industry perspectives respectively and collectively. The review and analysis of CE and selected industries’ research was supported by a co-occurrence keyword analysis of 5,960 most cited papers in CE as well as the two product categories, electric vehicles and white goods. The analysis indicated limited maturity and linkage of circular business models and role of product design toward a CE in the research literature for the product categories. This result corroborated the knowledge gap and guided our focus in searching for further research and industry clues. We structured the clues of interest that were specific to or common across product categories and industries, using the integrated framework to visualize our Design for X conclusion. The merged framework visualizes how paths toward CE by design and logic of value creation, delivery, and capturing may differ. To conclude, the authors’ own experience and literature examples from relevant industry-leading and start-up companies are used to apply the framework and reveal strengths, weaknesses, opportunities, and threats. Future research and industry experiments focused on the circular business models based on product service systems and design for CE strategies identified, will be needed to test and extend the framework to other product categories and industry sectors.

Business models for the circular economy, or circular business models, is a growing field of research applied in various industries. Global sustainability trends, such as electrification of the transport sector and increased energy consumption from renewable sources, have led to rapid growth in the number of batteries produced, especially lithium-ion based batteries. Sustainable lifetime management, including end-of-life, needs development to avoid social and environmental harm and potentially to recapture economic value as the use of these batteries increases. Current research primarily focuses on technical and economic issues based on recycling and the second use of batteries rather than circular business models. This study's purpose is to explore the circular business models, drivers, barriers, and stakeholders required to enable value recapturing. The Delphi panel method was applied to communicate with battery experts from various disciplines. The study's findings reveal that the favored circular business model includes several circular strategies. According to the expert panel, the most critical driver is national and international regulations and policies; the most critical barrier is financial viability; the most critical stakeholders are governments and vehicle manufacturers.

An expert system for circular economy business modelling: advising manufacturing companies in decoupling value creation from resource consumption

While researchers have increasingly investigated to what extent circular business models contribute to sustainability in various production chains, using circular strategies such as close, slow, marrow, regenerate, the automotive industry is little studied. Currently, most of the literature about sustainability and automotive industry focuses on exploring the impacts of vehicle use (on mobility, energy use, or air pollution), and there is almost no research on the production or post use impacts. Regarding circular business models, there is a lack of an integrative framework that analyzes the operationalization of these models in practice in the automotive industry, specifically in global south contexts, where circular business models are a relevant part of automotive markets, although they are almost ignored by researchers, public agents, and industry. To fill this gap, this research aims to answer the following question: how are circular business models characterized in the automotive industry, specifically in global south contexts? To achieve this goal, a review of relevant literature was conducted and, illustrative cases are presented with the aim of relating the application of theoretical constructs in the observation of business practice. Thus, it is expected that the relationship between circular business models applied to the automotive industry will be better illustrated and clarified, allowing to illustrate the application of the theoretical constructs established in the relevant literature in the context of the Global South and to identify potential drivers and barriers, as well as future lines of research.

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

Scientific literature lacks a comprehensive and extensive overview of business models built upon circular economy principles. Based on this premise, this paper performs a systematic literature review, through which it aims at identifying and then categorizing circular business models processed in the literature to date. Fifteen circular business models are identified and analysed. The results show that circular business models can be associated with different circular strategies, but that some are more studied than others. The research also indicates that each circular business model can be associated with one particular life cycle stage of a product-service, thus making it more suitable for a specific circular strategy.

This article discusses the role of data sources in data-driven circular business models (CBMs) that support sustainability. The circular economy (CE) is a response to the challenge of meeting sustainability targets, and CBMs have gained traction in recent years. Big data is seen as a driving force for the new circular economy, and can help overcome barriers to CBMs. Data sources are key elements of data-driven solutions, and this paper collects use cases that contain data-driven business models that contribute to CE, analyzes those use cases, identifies circular strategies in businesses, and displays the connection of them with data sources. The most frequently used circular strategies in the analyzed use cases are Reduce, Rethink, and Recycle, and the most frequently used data sources are Product-generated Data, Process Data, Open Data, Geographic Data, and User-generated Data. The paper recommends businesses focus on collecting product- and user-generated data for implementing circular strategies in their business model.

PurposeDigital innovation and circular business model innovation are two critical enablers of a circular economy. A wide variety of digital technologies such as blockchain, 3D printing, cyber-physical systems, or big data also diverges the applications of digital technologies in circular business models. Given heterogeneous attributes of circular business models and digital technologies, the selections of digital technologies and circular business models might be highly distinctive within and between sectorial contexts. This paper examines digital circular business models in the context of the fashion industry and its multiple actors. This industry as the world’s second polluting industry requires an urgent circular economy (CE) transition with less resource consumption, lower waste emissions and a more stable economy.Design/methodology/approachAn inductive, exploratory multiple-case study method is employed to investigate the ten cases of different sized fashion companies (i.e. large, small medium-sized firm (SME) and startup firms). The comparison across cases is conducted to understand fashion firms' distinct behaviours in adopting various digital circular economy strategies.FindingsThe paper presents three archetypes of digital-based circular business models in the fashion industry: the blockchain-based supply chain model, the service-based model and the pull demand-driven model. Besides incremental innovations, the radical business model and digital innovations as presented in the pull demand-driven model may be crucial to the fashion circular economy transition. The pull demand–driven model may shift the economy from scales to scopes, change the whole process of how the fashion items are forecasted, produced, and used, and reform consumer behaviours. The paths of adopting digital fashion circular business models are also different among large, SMEs and startup fashion firms.Practical implicationsThe study provides business managers with empirical insights on how circular business models (CBMs) should be chosen according to intrinsic business capacities, technological competences and CE strategies. The emerging trends of new fashion markets (e.g. rental, subscription) and consumers' sustainable awareness should be not be neglected. Moreover, besides adopting recycling and reuse strategies, large fashion incumbents consider collaborating with other technology suppliers and startup companies to incubate more radical innovations.Social implicationsAppropriate policies and regulations should be enacted to enable the digital CE transition. Market patterns and consumer acceptances are considered highly challenging to these digital fashion models. A balanced policy on both the demand and supply sides are suggested. The one-side policy may fail CBMs that entail an upside-down collaboration of both producers and consumers. Moreover, it is perhaps time to rethink how to reduce unnecessary new demand rather than repeatedly producing and recycling.Originality/valueThe pace of CE research is lagging far behind the accelerating environmental contamination by the fashion industry. The study aims to narrow the gap between theory and practice to harmonise fashion firms' orchestration and accelerate the transition of the fashion industry towards the CE. This study examines diverse types of digital technologies in different circular business models in a homogeneous context of the fashion industry with heterogeneous firm types.

Circular and bio-economy represents a political and industrial initiative to ensure that our society can rely on renewable biological sources while achieving economic growth. However, there is a need to critical review how realistic and feasible such initiatives are towards fulfilling the promised benefits of this economy. The literature on bio-economy often discusses the importance of innovative business models and their role in a successful shift to a bio-economy. Still, much of the discussion that is related to circular business models is fragmented and immature. Therefore, the purpose of this study is to conduct a systematic literature review of circular business model activities and the barriers to a bio-economy. Further, this review provides future research directions for a shift to a bio-economy. This study is based on a systematic review of 42 scientific journal articles and book chapters on a forest-based bio-economy. The business model canvas is used to provide a structured aggregation of the existing circular business models activities being used by the forestry sector. In addition, we develop a framework that describes the barriers to bio-economy-based circular business models and suggest new directions for future research. The study highlights the need for alignment among the elements of a business model as a key condition for its successful implementation in a bio-economy.

Switching from the current linear model of economy to a circular one has recently attracted increased attention from major global companies e.g., Google, Unilever, Renault, and policymakers attending the World Economic Forum. The reasons for this are the huge financial, social and environmental benefits. However, the global shift from one model of economy to another also concerns smaller companies on a micro-level. Thus, comprehensive knowledge on designing circular business models is needed to stimulate and foster implementation of the circular economy. Existing business models for the circular economy have limited transferability and there is no comprehensive framework supporting every kind of company in designing a circular business model. This study employs a literature review to identify and classify the circular economy characteristics according to a business model structure. The investigation in the eight sub-domains of research on circular business models was used to redefine the components of the business model canvas in the context of the circular economy. Two new components—the take-back system and adoption factors—have been identified, thereby leading to the conceptualization of an extended framework for the circular business model canvas. Additionally, the triple fit challenge has been recognized as an enabler of the transition towards a circular business model. Some directions for further research have been outlined, as well.

The rising popularity and strong increase in the number of electric bicycles make it necessary to consider the built-in resources as well as possible treatments after the use phase. The time lag between the purchase and the occurrence of relevant defects suggests significant increases in defective components. Especially the great dynamics of the market due to regular innovations, product renewals, and the lack of spare parts availability for older models make the long-term use by customers much more difficult than for conventional bicycles. Therefore, it is necessary to analyze circular business models for the electric bicycle market. In this way, the required structures for a sustainable electric bicycle industry can be created so that valuable materials do not go into disposal but undergo a new use phase. Based on the results of “AddRE-Mo–Value Preservation Scenarios for Urban Electromobility of Persons and Loads through Additive Manufacturing and Remanufacturing,” a research project funded by the German Federal Ministry of Education and Research, this paper addresses four circular business models, two sales models, and two service models. The guiding research interest of this paper is the combination of remanufacturing and additive manufacturing from a business model perspective, analyzing the extent to which additive remanufacturing can be considered a solution for electric bicycles' circularity. After describing the approach and methods used to develop these four circular business models the business models are described and analyzed using the Business Model Canvas. Based on this analysis, it is shown that the combination of remanufacturing and additive manufacturing can be applied to the electric bicycle market and be integrated into both sales and service models. The description of these business models will help managers design viable business models in the context of sustainable electric bicycles. It also shows that the individual partners within the value chain must collaborate more closely. In the electric bicycle industry, a single company will probably not be able to close the product cycle completely. Further research is needed to develop concepts of the business models and examine their practical feasibility in technical and organizational operations to achieve a circular economy.