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

2.3 Circular Economy 37

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Table 2 Analysis framework for this thesis

Innovation Type Circular Economy Approach

Product Innovation

(Changes the product)

Circular supplies (e.g. creation of products which are fully

circulatable)

Resource recovery (e.g. creation of new products to use left-

overs from the production line)

Remanufacturing (e.g. implementation of new products

which can be built from reusable parts of original products)

Process Innovation

(Changes the process)

Circular supplies (e.g. use of renewable energy for the produc-

tion line)

Organizational

Innovation

(Changes or adds a

business model)

Sharing platform (e.g. enable customers to extend the use of

their products)

Product as a service (e.g. sell access to the product, internalize

the lifecycle management)

Product life extension (e.g. gather used products and resell

them if possible, repair broken products)

In order to be able to assign the business models to the three innovation types the

following considerations were made:

Product innovation means that an organization releases a new type of product

or variant of a product into the market. Only the business models circular supplies,

resource recovery and product life extension in the sense of remanufacturing are

sorted into this category. In a circular economy the category product innovation

suggests creating products which are fully circulatable (circular supplies) or creating

new products by using leftovers from production (resource recovery). Remanufac-

turing offers a possible business model when companies invent new products from

the reusable parts of their original product.

The second type the process innovation involves a bigger change in the daily

practice of a company. In the circular economy framework only the circular sup-

plies business model has been assigned to this category. For the implementation

this means switching partially or entirely to renewable energy sources (circular

supplies) as supply for the production lines.

Organizational innovation has the following business models assigned: shar-

ing platforms, the product as a service and product life extension. In a circular

economy this provides options such as initiating a sharing platform which enables

customers to extend their product use by sharing it with others. In addition to this,

companies can offer their products as a service meaning that instead of selling

their product organizations only sell the use of it. This implies a re-consideration

of the whole lifecycle management. The last business model which falls into this