This web app uses cookies to compile statistic information of our users visits. By continuing to browse the site you are agreeing to our use of cookies. If you wish you may change your preference or read about cookies

April 25, 2024, vizologi

Five Classes of Circular Business Models

Imagine a world where waste becomes a thing of the past, and resources are used endlessly.

This is the essence of the circular economy, a new model rapidly gaining traction.

As we move towards a more sustainable future, companies are exploring innovative circular business models to stay competitive.

These models encompass everything from circular inputs to sharing platforms, each offering unique benefits.

Let’s dive into five key classes of circular business models shaping the future of commerce.

What are the five classes of circular business models?

Circular Supplies Business Models

Circular supplies business models are important for resource recovery and sustainability. They use renewable, recycled, or highly recyclable materials in production to reduce waste and pollution.

These models turn waste into valuable assets, making production more efficient and eco-friendly. Businesses can also design products for repairability, upgradability, and reusability to extend material life and reduce waste further.

Integrating sharing platforms can optimize resource usage by allowing shared product and asset use, boosting productivity and value creation. These approaches not only reduce environmental impact but also provide value to customers, generating revenue, and promoting sustainability.

Circular supplies business models offer a strategic solution to global economic challenges. They highlight the importance of circular principles and sustainable practices across value chains.

Resource Recovery Business Models

Resource recovery business models are important in the circular economy. They focus on efficiency and sustainability.

Companies can implement these models by:

  • Strategically sourcing secondary raw materials,

  • Collecting and recycling waste streams, and

  • Establishing industrial symbiosis within supply chains.

Developing a successful resource recovery business model involves:

  • Ensuring ownership and control of products throughout their lifecycle,

  • Adopting a product service system approach, and

  • Emphasizing the value proposition of resource recovery activities.

Circular design principles like cradle-to-cradle approaches and remanufacturing processes help reduce supply chain risks and environmental impact.

Resource recovery models help businesses reduce social costs, increase resilience, and create revenue from sustainable products. It’s important for stakeholders to understand the benefits of these models for a more sustainable future.

Product Life Extension Business Models

Successful Product Life Extension Business Models include several key components:

  • Circular inputs

  • Sharing economy concepts

  • Product as a service

  • Product use extension

  • Resource recovery

Companies focus on extending product life through circular economy practices like repairability, reusability, and recyclability. Maximizing product lifecycle and ensuring materials are recovered at the end of use are crucial strategies.

Innovation and technology play a significant role in driving these models. Companies use secondary raw materials, circular design principles, and activities like remanufacturing to optimize their value chain. This approach helps reduce environmental impact, minimize waste, and enhance supply chain resilience.

Adopting a circular business model enables companies to offer innovative, eco-friendly products, build a strong case for circularity, and decrease social costs linked to traditional linear models. By embracing strategic sourcing and a cradle-to-cradle mentality, businesses can benefit from zero waste, sustainable practices, and a profitable business framework.

Sharing Platforms Business Models

Sharing platforms in circular business models revolutionize resource utilization and sustainability. They maximize asset use across a community.

Unlike traditional models, sharing platforms promote collaboration and reduce waste. They encourage sharing products with low ownership rates.

By leveraging idle resources effectively, these platforms ensure optimal utilization. This enhances productivity and value creation.

Sharing platforms benefit consumers by providing affordable access to products. They also help businesses maximize the use of expensive assets, resulting in higher utilization percentages.

These platforms contribute to a more sustainable use of resources. They align with the principles of the circular economy.

Through strategic sourcing and value creation, they minimize social costs and environmental footprints.

Adopting a sharing platform model helps businesses minimize waste and develop symbiotic relationships. It also enhances supply chain resilience and promotes the reuse of materials.

Embracing this model allows companies to optimize resource recovery and establish a strong value proposition. It helps generate revenue and differentiate themselves in the global economy.

Jennifer Gerholdt’s Perspective on Circular Business Models

Jennifer Gerholdt looks at important factors like activities, adoption, and the business case in analyzing circular business models. She stresses the role of sharing platforms in the circular economy. These platforms help companies use products more efficiently, boost productivity, and add value.

She also points out the advantages of including product life extension models in a company’s strategy. These models extend the product’s life to maintain economic value and reduce waste.

Leading Companies Embracing Circular Business Models

Novozymes and Sustainability

Novozymes website

Novozymes believes in sustainability. They use circular business models to promote sustainability. Here’s how they do it:

  • They focus on resource recovery and product life extension.

  • Novozymes practices industrial symbiosis and cradle-to-cradle design.

  • They aim to minimize waste streams and maximize the use of secondary raw materials.

  • By moving towards a product service system, they make their products last longer.

  • This helps reduce their environmental footprint and creates value for stakeholders.

  • Novozymes wants to drive revenues and reduce social costs while aiming for zero waste.

  • Their strategic sourcing practices and circular design show their commitment to a sustainable future.

  • By setting clear business strategies and pricing models, Novozymes stands out as a leader in the circular economy.

  • They demonstrate how circular business models can have a positive impact on the environment.

Intel’s Approach to Circular Economy and CO2 Emissions

Intel has adopted circular economy principles. They focus on strategies like extending product life cycles and promoting sustainability. This helps reduce CO2 emissions effectively.

By implementing circular business models, Intel engages in activities such as supply chain optimization, resource recovery, and circular design. These activities minimize waste streams and maximize the use of secondary raw materials.

Intel enhances the value proposition of its services by implementing a product service system and sharing platforms. This also helps in reducing environmental footprint.

The company strategically sources materials and implements remanufacturing processes. This aligns with the key characteristics of circular business models.

Intel shows commitment to reducing social costs and achieving zero waste by addressing supply chain risks and building resilience.

Through these innovative practices, Intel positions itself as a leader among born-circular companies in the digital business era. They focus strongly on sustainability and maximizing stakeholder value.

Eileen Fisher’s Circular Business Models and Competitive Edge

Eileen Fisher uses circular business models to stay competitive in fashion. They focus on sustainability by recovering resources and extending product life.

This reduces waste and their environmental impact. These practices align with circular business models and offer innovative, eco-friendly products.

Eileen Fisher also sources secondary raw materials strategically, building resilient supply chains and decreasing risk.

Their commitment to zero waste and low social costs drives success globally.

Through circular business models, Eileen Fisher leads in sustainable fashion and promotes a more eco-friendly industry.

Vizologi is a revolutionary AI-generated business strategy tool that offers its users access to advanced features to create and refine start-up ideas quickly.
It generates limitless business ideas, gains insights on markets and competitors, and automates business plan creation.


+100 Business Book Summaries

We've distilled the wisdom of influential business books for you.

Zero to One by Peter Thiel.
The Infinite Game by Simon Sinek.
Blue Ocean Strategy by W. Chan.


A generative AI business strategy tool to create business plans in 1 minute

FREE 7 days trial ‐ Get started in seconds

Try it free