Circular Economy Experiments for Established Firms : A Business Model Perspective

University essay from KTH/Skolan för industriell teknik och management (ITM)

Abstract: The circular economy has during the last decade gained traction within academia, politics, and business as it is expected to promote sustainable economic growth and tackle resource scarcity. Further, established firms have to be sustainable to create a future return and be competitive. The circular economy can help firms reduce their environmental impact from business activities and enhance the value of resources. Yet, there is a general lack of understanding of the actions leading towards a circular economy and how the adoption of circular economy principles generates value in a business context. The literature argues that through experimentation of circular novelties, established firms can take the first steps in their transition towards a circular business. This thesis aims to contribute with novel empirical data to the literature field of circular economy, strategic niche management, and business model, where the research questions are framed to address the following purpose: explore how established firms experiment with circular economy and how this experimentation influences the firms’ value proposition and creation. To understand its value chain, the firm must realize its context by adopting a meso-level perspective. Grounded on the empirical setting, the empirical findings and the discussion, an analysis allow us to conclude ten propositions of how circular economy experimentation unfold within firms and how circular economy implementation at the micro-level impact the value chain. The propositions can be divided into three areas of contributions. First, the findings contribute with knowledge on how circular experimentation evolves within the established firm. Second, the thesis contributes with an increased understanding of how the circular economy experimentation within the established firms is affected by the surrounding sectoral actors. Third, the study makes analytical contributions of how circular economy experiments within the established firms influence their value proposition, creation, and capture.

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