Identifying Practices and Patterns
The transition towards a circular economy is increasingly being recognized as a potentially sustainable alternative to the current linear economic model. Despite the growing interdisciplinary interest, the transition towards circular business models is still in its early stages and requires further exploration. This article uses the business model innovation concept to investigate how firms transition towards circular business models. In this research, we analyze a diverse sample of 63 firms that have implemented circular business model innovations and identify 46 specific practices that are classified into the three value dimensions of a business model and the 10R value retention options. We propose various circular business model innovation patterns that consist of specific combinations of managerial practices to exploit a firm’s current resources and abilities, and explore potential future opportunities in line with the circular economy principles. A balanced circular business model innovation involves the combination of exploitative and explorative practices implemented in the three value dimensions of a business model, using different value retention options. However, we identify patterns that prioritize either exploitation or exploration. Our study contributes to the field of circular business model innovation by providing a set of practices and specific patterns to successfully implement circular business models.
Circular Economy, Circular Business Model Innovation, 10R Framework, Resource Retention Options, Exploration, Exploitation