36 2 Theoretical Foundations
identified are: circular supplies, resource recovery, product life extension, sharing
platform and product as a service (Accenture 2014). Before assigning the models
to the innovation types their characteristics will be explained.
Circular supplies describes business models that are based on renewable, circu-latable or biodegradable resources. The objective is to completely replace a linear
resource model, reduce the use of scarce resources and eliminate waste.
Resource recovery focuses on the end of a product’s lifecycle and that productsare made to be fed into one of the two possible value chains at the end of their
product life: biological and technical cycle. In this business model it is important
that recycling is done to the same quality or an even higher level to create a circular
flow. It is necessary to consider the end of life of a product in the design phase. By
doing so, the best solution for processing a product and its raw material at the end
of its first lifecycle is ensured. Furthermore, this business model is applicable for
by-products which appear during production. The implementation possibilities range
from industrial symbiosis where several organizations share services, utility and
by-product resources to closed-loop production systems for singular organizations.
The product life extension business model attempts to prolong the usage of aproduct either by repairing the broken parts, or by upgrading, remanufacturing or
remarketing it. In this model it is important in the design phase to create products
with replaceable modules so that broken parts can be replaced by an equivalent
or upgraded part.
Sharing platforms provide a place for collaboration between product users i.e.individuals and organizations. The objective in this business model is to maximize
the utilization of a product by sharing overcapacity and reducing underutilization.
The last business model identified in the Accenture study is product as a ser-vice and it represents a fundamentally different approach to the ‘product owner
economy’. In this business model products are no longer sold to the customer.
Organizations only sell a certain outcome and customers pay for the use or per
lease (Accenture 2014).
Combination of Innovation Types and Business Models into one
Framework
For the purpose of the framework of this thesis, the business models have been
assigned to the three innovation types. This provides further guidance on how to
categorize and then analyze the implementation approaches in the case study. Table
2 shows the combination of innovation types and business models which result in
seven circular economy approaches.