Exploring barriers to implementing different circular business models

Abstract

Even though much attention has been given to barriers related to implementing circular business models, so far, no studies have focused on how the barriers differ between business models. Ignoring the possibility of such differences could lead to unjustified generalizations about the barriers to implementing circular business models (CBMs). We identified barriers to implementation and compared them for different CBMs by analyzing 43 case studies of CBMs, based on in-depth interviews with 31 Dutch firms. Barriers were analyzed for the following CBMs: circular supplies, resource recovery, product life extension, and the product-as-a-service model. The barriers identified were classified into two broad categories: internal problems related to the firm itself and external barriers related to the firm's environment. This study shows that key challenges were related to the firm's external environment, and that the barriers differed between the four business models studied. Whereas most internal barriers encountered by the product-as-a-service model were to do with organization (for instance, of lease models), the other models reported these barriers less frequently. External supply chain issues were challenging in the resource recovery, product life extension, and circular supplies models, mainly because of great dependence on third parties for the input of discarded products and waste materials. We investigated the strategies firms used to overcome these barriers. From our findings we conclude that to stimulate the development of circular businesses, firms and policy makers should focus on bespoke solutions and strategies for different types of CBMs.