Toward a Process Framework for Circular Business Model Innovation

Josefin Dahlén

Student thesis: Master thesis


The academic and managerial literature on Circular Economy hails business model innovation as the way to catalyst Circular Economy in society and as the way for businesses to reap the benefits of such a system. Previous literature has provided insights into how so called circular business models can be modelled, but have failed to address the dynamics of the process through which a circular business model can be developed over time. Using modelling tools such as business canvases or frameworks could help in exposing some of the opportunities for Circular Economy, but will not help incumbent firms bring their existing business models to a new state and manage the change. Thus, this thesis focuses on understanding how business model innovation can be used to support the adoption of Circular Economy principles. The contribution of this thesis is twofolded. Firstly, it collects, clarifies and synthesizes literature from separate research streams to allow for a better understanding of the concept of circular business models and circular business model innovation. Secondly, it contributes with insights to practitioners interesting in exploring the opportunities to adopt circular economy principles.
Literature on Circular Economy, business models and business model innovation together with empirical input from two case companies are used to propose a new process framework for circular business model innovation. It suggests phases and corresponding activities that could facilitate a company’s move to a more circular business model. The framework takes into considerations the limited agency of companies to fully control the development process by considering different barriers and enablers which might influence the company at different points in time.
Although fully closing loops and achieving 100 % circularity are to be regarded as utopian, the thesis recognises that companies have the opportunity to gradually advance their business models by sequentially incorporate Circular Economy principles in the form of concrete business actions, based on the ease of implementation and degree of system impact. This will ensure that a company avoids spending resources by focusing on actions with low feasibility and low impact potential. It also recognises the importance of aligning initiatives with key actors in the surrounding value network and the potential to leverage capacity and knowledge from external knowledge sources throughout the process.

EducationsMSc in Management of Innovation and Business Development, (Graduate Programme) Final Thesis
Publication date2017
Number of pages94
SupervisorsJens Frøslev Christensen