Exploring barriers to implementing different circular business models

Abstract

a b s t r a c tEven 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.

Organizational transition management of circular business model innovations

“…CBMs are diametrically opposed to dominant business approaches of the last decades, which mostly tend to incorporate principles of acceleration, such as raising the frequency of product innovation and boosting the number of products sold within a time period, to increase competitiveness (Boutellier et al, 2008;Krajewski et al, 2016). Burdened by their own linear aligned traces of the past and cultural fixation on the "take-make-dispose" paradigm, firms are embedded within financial, institutional, legislative, infrastructural arrangements that are shaped by path dependencies of linearity and that proactively encourage and support the design and development of linear BMs (Tura et al, 2019;Vermunt et al, 2019). These structures may contribute to a broader environment in which such a profound change in value creation modes appears unviable.…”

“…First, such research has considered justifications for companies embracing modes of circular value creation and offerings, focusing on motivational aspects, drivers, and opportunities of CBM innovation (such as enhancing competitiveness by increasing cost efficiency due to lower demand for energy and physical resource inputs; attracting new environmental-conscious customer segments; or becoming more autonomous and independence from volatile commodity markets, (Gusmerotti et al, 2019;Planing, 2018;Rizos et al, 2016;Rubel et al, 2018;Whalen et al, 2017) and the financial, organizational, market, and institutional risks and barriers of integrating CE principles into daily business routines (Linder & Williander, 2015;Sousa-Zomer et al, 2018;Tura, Hanski, Ahola, Stahle, Piiparinen, & Valkokari, 2019;Vermunt et al, 2019). Second, existing CE studies have explored the contours of CBMs, describing the constitutive elements of CBMs and their strategic design that can be summarized as conceptual debates (e.g.…”

Circular Economy Indicators as a Supporting Tool for European Regional Development Policies

“…The proposed systems are continually being developed by the Chinese government, and in order to improve the effectiveness of such indicators, in 2017 the NDRC realised updated CE evaluation indicators which include 17 indicators categorized into three groups. The new system focuses the most on the national and provincial levels [45,54].…”

Analysis of Barriers to Transitioning from a Linear to a Circular Economy for End of Life Materials: A Case Study for Waste Feathers

“…However, the primary barriers were reported to be a lack of financial resources to make circularity happen, and this was related to the financial vulnerability of SMEs and a lack of managerial, design and sustainability competencies. Work has also identified the barriers to circular business models influencing companies in The Netherlands [38]. The barriers were different depending on the business model of the company, with internal and external barriers identified and critical challenges related to corporate externalities.…”