Exploratory Study on Circular Economy Approaches A Comparative Analysis of Theory and Practice

114 5 Result of Analysis and Interpretations

It is quite intuitive to realize that some of the impacts influence other impacts. First

example for such a dependency is that both non-monetary aspects (competitive
advantage and reputation) might have a positive influence on the monetary aspect
revenue. To be more precise, in case organizations are able to obtain a competitive

advantage and/or develop a good reputation for their brand this might even increase
the acquisition of new customers which increases the revenue.

Second dependency exists between reputation and competitive advantage. If an

organization creates a positive brand image and builds up brand trust this increases

the possibility for differentiation from competitors and has therefore positive impact

on the competitive advantage.

Third dependency identified in the categories of 5.2 exists between costs and

competitive advantage. In case the costs for circulatable material decreases the

competitive advantage is increased due to increased cost leadership.

The section above shows that the impacts the implementation of circular economy

has on organizations are highly interdependent. These dependencies are also the

reason why the grouping of sub-categories to impacts has not always been distinct

and might be subject to future discussions.

5.3 Practical Challenges for Realizing Benefits

in a Circular Economy

5.3 Practical Challenges for Realizing Benefits in a Circular Economy

The empirical data in this study reveals the many challenges that hinder organi-

zations from realizing the potential benefits of circular economy. The three main

challenges identified are shown in Figure 6 and explained in the following chapters.

5.3.1 Nascent Stage of Concept

The first challenge is that the concept of circular economy is in its nascent stages.

As explained in chapter 2.3.1, broader awareness about the concept of circular

economy started growing in 2009 e.g. with the work of governmental organizations

(e.g. China’s Circular Economy Promotion Law in 2009 or the Communication

“Towards a circular economy: a zero waste program for Europe” by the European

Commission), non-governmental organizations (e.g. Ellen MacArthur Founda-

tion, Zero Waste Europe), and steps taken by commercial retailers worldwide (e.g.

Patagonia, Coca-Cola, Ebay, H&M, etc.).