Instigating collaborative business innovation for circular value creation, the case of the French sports and leisure sector

Joël Ntsondé^1,5*, Rémi Beulque^2,5, Helen Micheaux^3,5, Marcus Bergmann⁴

¹ISTEC Business School; ²ISC Paris; ³AgroParisTech – Université Paris Saclay; ⁴ECSP Business School, ⁵Mines Paris – Université PSL

*[email protected]

Keywords

Collaboration, Circular business models, Innovation, Extended Producer Responsibility

Extended Abstract

Developing new business models that are capable of addressing the complexity of sustainability issues require collaboration (Rohrbeck et al., 2013). (Roome and Louche, 2015; Guldmann, E., & Huulgaard, 2020). An increasing number of scholars has studied circular business model innovation through collaboration. These scholars have been mainly interested in the design of circular business models and their implementation through collective efforts. Thereby some scholars focused on actors that had already entered into collaborations and studied the benefits of collaborating and the emerging business models (Geissdoerfer et al., 2018).

Other researchers have analyzed processual approaches to investigate the dynamics of circular business models innovation. Regarding the consumer market, Bocken & Konietzko (2022) have studied organizations in the textile, electronics and furniture sectors and shown that collaboration is a key asset to get access to complementary dynamic capabilities or develop new activities required for circular business model innovation. However, even if Crespo et al. (2022) have studied how a French retailer was designing and implementing circular business models in mountain sports, so far there has been little research about collaborative business model innovation for circular value creation in the sports and leisure sector.

Several scholars have identified diverse challenges, including the reluctance to involve external partners, the lack of knowledge and competencies in value chain, the time required to build mutual trust, difficulties in coordinating the value network or the heterogeneity of post-consumer waste (Guldmann & Huulgaard, 2020; Geissdoerfer et al., 2022). Some of these challenges provoked actors to abandon their interest in collaborating and ultimately led to the failure of collective work. Studying the process of setting up collaborations for designing new business models can provide insights on how to overcome latter challenges and contribute to successful collaborations. Therefore, in this paper, our research question is to understand how actors can engage in collaborative business innovation to develop ecosystems favorable for circular practices such as eco-design, repairability and durability, especially in the sports and leisure sector.

To address our research question, we study the creation of an Extended Producer Responsibility (EPR) system in France which is led by a Product Responsibility Organization (PRO), a collective organization managed by producers and controlled by public authorities. The focus of our analysis lies on how the PRO, manufacturers, and retailers collectively organize themselves to create value and enable the emergence of an ecosystem that will foster the development of circular business models in the sector of sports and leisure.

Over the last decades the concept of EPR, based on the “polluter-pays” principle , has been developed in Europe, and more recently on a global level, in several sectors such as packaging, automotive and electrical and electronic equipment (EEE) (Mayers & Butler, 2013; Niza et al., 2014). It is based on the “polluter-pays principle” (PPP), i.e., a cost allocation principle which means that polluters bear the costs of their pollution. By applying this principle, manufacturers are incentivized to reduce the environmental damage of their products during their lifecycle.

While the implementation of the EPR concept differs from one sector to another, most EPR systems include a Producer Responsibility Organizations (PROs). Producers tend to organize themselves collectively through the creation of PROs to achieve economies of scale and reduce their costs. PROs are responsible for organizing and developing the collection and recycling of waste. These activities are financed by the member producers who pay a contribution according to the products they put on the market.

To answer our research question, we study the development of a new EPR system in France for the sports and leisure industry. We have conducted 9 interviews with PRO, manufacturers, and retailers to understand the challenges of setting up this new EPR system and how they collaboratively overcome them. To complement this data, we organized 2 workshops, with a PRO, a manufacturer, and an NGO engaged in circular economy to work collectively on potential solutions for developing circular business models.

To analyze our data, we have used a processual approach, i.e., we apply sensemaking strategies such as narratives, visual mapping, and temporal bracketing (Langley 1999) to identify key stages and mechanisms for initiating and setting up collaboration for circular business model innovation.

Our research provides a detailed analysis of the process by which the PRO, manufacturers, and retailers seize the new legal framework of circularity to collectively engage in a process of designing and experimenting new forms of value creation. They launch a set of innovations and experiments of indicators and business models which shape an ecosystem organized around circular value creation. We also explain how the French legal framework has influenced the way this process unfolded.

Our findings contribute to the literature of sustainable and collaborative business models (Rohrbeck, 2013; Jonker et al., 2020), by showing how different actors can exploit a favourable institutional context to collectively develop new forms of value creation such as repairable, long-lasting and second-life products. Our results also enrich the discussions about collaborative circular business model innovation (Bocken et al., 2018; Bocken et Konietzko, 2022; Geissdoerfer et al., 2018), especially regarding the strategies developed collectively by manufacturers and retailers in the case of EPR systems to cope with the rising expectations for repairable and long-lasting products.

References

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