Circular business model experimentation capabilities—A case study approach

Abstract

Real-world experiments are best suited for testing and validating novel circular business models (CBMs). Despite the increasing prominence of experimentation in CBM research, there is a lack of investigations on how firms manage and organize CBM experiments. This study aims to fill this research gap by examining the organizational capabilities needed to orchestrate CBM experiments, beyond prototyping, piloting, iterating, and scaling up. Drawing on a systematic within-and cross-case analysis with two fundamentally different firms that nevertheless share the same objectivethe dynamic stabilization of a long-term viable CBM-we offer a new perspective on the management and organization of CBM experiments. The study shows how the investigated firms have developed three CBM experimentation capabilities over time, which can be disaggregated into (1) contextualizing, (2) dynamic co-structuring, and(3) governing intangible assets. Moreover, the findings provide further theoretical directions for CBM experiments and identify gaps for future research.

A Systematic Literature Review on the Transition to Circular Business Models for Small and Medium-Sized Enterprises (SMEs)

“…The entrepreneurs' enterprise strategies strive to reconcile societal issues and environmental challenges with economic success, thus combining business and humanitarian motivations [32,36,37,41]. In other words, the motivation of SMEs for applying CBM is related to the development of economic value that concurrently supports social and/or environmental goals and thereby influences society and the environment [16,17].…”

“…Chen et al [38] propose tha circularity necessitates modifications to the inherent characteristics of the conventiona business model by analysing its actual financial and operational performance. In addition to altering their nature to recognise value, enterprises must migrate from enterprise-cen tric to network-centric by integrating with other stakeholders [10,16,17]. Some research studies (e.g., [35,39]) argue that for enterprises to change, fundamental rethinking is re quired, including value generation through decoupling enterprise growth and resource use.…”

“…Even though there is still a huge gap in practical recommendations for transitioning a business model from linear to circular and the discussions on CBMs are still fragmented and immature, the existing literature provides a few strategies and insights on the development of implementation strategies that could be deployed [1,2,19,25,35]. For example, adopting a stewardship role [1,37], formulating and offering a sustainable value proposition (thus embedding environmental, social, and economic aspects) [16,45,53], engaging in collaborative circular networks [7,10,42] and partnering with and developing suppliers, service suppliers, manufacturers, retailers, and customers in addition to understanding how to create value are all required for the implementation of circularity in business models [3,13,26].…”

“…The first is that the transition may be amplified or slowed considerably, depending on the legislation and policy mechanisms used by government institutions. Secondly, the transition is intrinsically tied to enterprises that incorporate circularity into their business models to create a healthy economy that satisfies demand within environmental constraints [14,16,17].…”

Proposition of a structural model for business value creation based on circular business models, innovation, and resource recovery in the pet industry

“…Thus, H5 is presented.H5 Resource recovery positively influences business value creation.Circular business models are characterized by the adoption of strategies that aim to create and capture environmental, social, and financial value, which meet the needs and demands of consumers without harming the environment and future generations. The process of creating value in the context of circular economy demands innovation in business models to provide smarter solutions than those provided by traditional businesses (Hofmann & Knyphausen‐Aufseß, 2022). Therefore, the value created derives from more efficient and rational practices in the use of resources, which implies the continuous aggregation of value from the management of circular businesses (Nussholz, 2017).…”