Aaltodoc publication archive (Aalto University institutional repository)
School of Business | Department of Management Studies | MSc program in Management and International Business | 2015
Thesis number: 14343
Designing out waste: an exploratory study of circular business models
|Author:||Poutiainen, Paige Swaffer|
|Title:||Designing out waste: an exploratory study of circular business models|
|Year:||2015 Language: eng|
|Department:||Department of Management Studies|
|Academic subject:||MSc program in Management and International Business|
|Index terms:||kansainväliset yhtiöt; international companies; kiertotalous; circular economy; mallit; models|
» hse_ethesis_14343.pdf size:715 KB (732003)
|Key terms:||circular business model; circular economy; business model canvas|
The circular economy is an emerging model that experts believe is able to resolve the conflict between resource constraints, environmental degradation and economic growth. In short, it is a model for an economy designed to work in harmony with the environment by designing out waste, relying on renewable energy and embracing diversity and systems thinking. Many have claimed that companies will lead the transition to a circular economy. However, much is still not understood about how companies can prosper in a circular economic system. In this study, I first review the literature to propose a definition for a circular business model. I define it as the rationale of how an organization creates and delivers value to customers and captures value for itself while it simultaneously designs out waste, relies on renewable energy, thinks in systems, and embraces diversity to build organizational resilience. A thorough review of the literature reveals that the elements of circular business models are often discussed by isolating one business model element such as product as service systems as revenue models. Since isolated elements alone cannot effectively design out waste, I argue that a more holistic, systems thinking perspective is needed. In the empirical part of this study, I explore how companies use the business model to design out waste and operate in a circular economic system using a more holistic framework. I investigate the business models of four companies-Patagonia, Rype Office, Splosh and Desso-and analyze them using the business model canvas as a research lens. My analysis shows that all of the cases studied need at least seven (of nine) business model elements to design out waste. The results indicate that to support circularity companies must design the business model holistically, focusing on several business model elements simultaneously. This explorative study takes the first steps in the long journey to understanding circular business models. It provides support for a holistic approach and clues for further research. Yet, in the domain of circular business models, many opportunities remain for future research.
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