How do companies launch circular service business models in different countries?

Abstract

Companies experiment with new circular service business models (CSBMs) to respond to environmental and competitive pressures. CSBMs help companies to conserve and reuse products and materials over time while providing unique customer service. Companies typically launch a business model in one country and then roll it out to others. This comes with many challenges and strategic choices. Little is known about the external factors that influence the launch of CSBMs in different countries. This study draws on interviews within eight internationally operating companies that launched CSBMs in different countries, to develop a conceptual framework of seven external factors: environmental, knowledge & information, technology & infrastructure, socio-cultural, supply & partner network, market, and regulatory. We also discover six adaptation strategies to anticipate these factors: 1) promote learning for sustainability and circular economy, 2) reframe the sustainable value proposition based on cultural context, 3) collaborate to create new circular service rules and infrastructure, 4) develop location-specific technology capabilities, 5) build momentum and trust in service models, and 6) customise product and service offerings. This research contributes knowledge to CSBM design in different countries. It supports practitioners in better managing the launch of new CSBMs in different countries, and allows policymakers to create a better enabling environment.