Business strategies to go circular

Business strategies to go circular

This lesson discusses an overall concept of transiting from a linear to a circular business model. It introduces the Value Hill concept, which illustrates a journey of value creation to value retention through post-use stages. The Value Hill demonstrates the importance of maintaining the value created through the initial stages of a value-creation process, which we conventionally recognise in linear businesses, and prevent a product to turn into waste thanks to circular approaches applied throughout the journey. The circular economy strategies focus on narrowing, slowing, and closing loops of resource flows resulting in using fewer resources, prolonging product life through design and repair, and recycling to keep resources in a circular flow.

A critical assessment of an organisation’s activity using a Business Model Canvas shows, how the value proposition is created in a circular way and cash flows may be structured accordingly, ultimately transforming circular strategies into actionable plans. Most circular business models associated with three main stages of a circular value chain are characterised: Circular Design, Optimal Use and Value Recovery, each with specific strategies to enhance circularity and resource efficiency. These strategies combine five generic types of circular business models. The fourth business model type, Circular Support Models often requiring a networked organisation characterises circular facilitators and is less commonly considered as a destination of a circular business model transformation.