The complexity of circular business models and the effect of firm size in the clothing industry - A variable development and quantitative study for the clothing industry

University essay from Göteborgs universitet/Företagsekonomiska institutionen

Abstract: With the newly added focus on the social and environmental costs associated with the fast fashionand clothing industry, many researchers have attempted to solve the problem and come up withvalid theories for change. A way to minimize externalities is with the implementation of circular businessmodels, which have become increasingly relevant to prolong the life cycle of products, reducethe use of natural resources and minimize harmful emissions and can, therefore, be a possible solutionto the problem. However, there are many different interpretations of the model, and there is nogeneral consensus that can be applied regardless of industry. Instead, it appears that customization isnecessary to fully capture the possible benefits. This thesis attempt to address this gap and provideclarity to the subject by conducting an extensive literature study review in order to investigate prominentresearch in the field of circular business models and present their similarities and differencesregarding the distinct benefits, problems and opportunities of the model. Based on the result of theliterature study, three variables are developed to show how a quantitative analysis can be made witha focus on a single industry. This was made as little research has been done regarding the correlationof (clothing) firm-size and the willingness to implement circular business models. The result of thethesis indicated that, while the implementation of circular business models appears to somewhatcorrelate with firm size, more research is needed to better understand the full extent of the potentialbenefits and problems. Furthermore, as customization of circular business models appears to be arequisite for implementation due to differences between industries, a general consensus could,therefore, facilitate the development of such personalized models and enable the transition throughoutthe economy.

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