Understanding circular business models: drivers, obstacles and conditions towards a successful transition

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School of Business | Master's thesis
Creative Sustainability -maisteriohjelma
MSc Degree Programme in Creative Sustainability
Degree programme
Abstract A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which resources are kept in use for as long as possible, value creation is maximized in the use phase and products and materials are recovered at the end of each service life. The thesis explores this concept by taking a business model perspective. The theoretical part of the thesis clarifies the phenomenon of circular economy. It summarizes the development of the concept from an historical perspective and clarifies its position with regards to existing contemporary concepts (biomimicry, industrial ecology, cradle to cradle, blue economy, performance economy). By taking a business model perspective on the concept, the thesis attempts to offers a first typology of circular business models. Through the field work, the thesis extends knowledge on the understanding of circular business models at practical level. It highlights the differences between the theoretical underpinnings of the concept (its principles) and its implementation, showing that there is a gap between the concept and the way companies implement it. The findings allow the author to discuss how circular business models are classified and shows that many hybrid circular approaches can emerge. The analysis of the common features of the cases allow the author to draw a first set of normative requirements that define how a circular business model is organized. The cross analysis of the cases supports the development of a framework highlighting the current drivers at internal and external level pushing company to operate within circular economy principles, addressing a set of conditions allowing for the successful implementation of circular business models, while acknowledging a number of recurrent challenges preventing from a full implementation of the concept. At the core of the framework is set of key steps explaining how the transition occurs.
Circular Economy, Business model innovation, Sustainability.
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