5.2 Impacts of Circular Economy Implementation on Organizations 107
107
The statements above lead to the conclusion that although organizations put alot of effort into R&D for circulatable material and products, there is still much
work to do. More variety of material, as well as technological innovations, are
necessary to further enable the transition towards a circular economy. In order to
find adequate substitutes the organizations are required to invest in research and
development together with their cooperation partners. These investments have a
negative financial impact on the organizations.
5.2.1.2 Monetary Impact 2: Revenue
The second financial impact is the additional revenue that can be generated through
the implementation of a circular economy. Additional revenue can result from:
acquisition of new customers, reselling of used products, and getting more output
from the same amount input.
5.2.1.2.1 Sub-Category 1: Acquisition of new Customers
The acquisition of new customers generates additional revenue. Organizations
are able to approach new customer groups that weren’t previously aware of the
brand but are interested in circular economy products. The interviewee of case
Eta describes it as follows: “And we not only created an image to stand for that topic
but we acquired new customer groups, such as those who aren’t typically customers
of outdoor clothes but who have a ‘green lifestyle’. These customers didn’t know our
brand before, but now they know us” (see Appendix: German Quote 60). By searching
for circulatable products the customers come across the brand because it is one of
the leading brands within its industry. Customers appreciate the commitment and
include it in their decision to buy. Interviewee of case Zeta stated: “Certainly there
are many customers within our target group, who have sensitivity for that topic, who
appreciate it” (see Appendix: German Quote 61).
5.2.1.2.2 Sub-Category 2: Sale of Refurbished Products
Second option is creating additional revenue through sale of refurbished products.
If there is only limited effort required to refurbish a circulatable product at the end
of the lifecycle and resell it as ‘new product,’ additional revenue can be generated.
Although, this product might be offered at a cheaper price material costs get paid
twice and the labor costs for preparing the product for resell are by far exceeded.
Representative of case Gamma forms it as follows: “(...) we could remove the products
from the floor and resell them to other customers. Of course not at the original price
but we expect to get approximately 70 percent of the original price. And if that works
the costs for the wood are paid twice, which would be good for us” (see Appendix: