4.3 Case Alpha 59
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according to the interview partner, lack of information about the service offered
and recycling and reusing clothes. What is needed is customer education to raise
awareness that apparel is something which can be recycled and doesn’t need to end
up in landfills. The company representative describes the challenge as follows: “Do
you know what is needed? To educate more people about thinking of clothing and
apparel as something you can recycle instead of having it end up in landfill.”
Furthermore, the organization identifies its main challenge as being higherprices for recycled resources specifically recycled polyester. The organization has
to absorb the additional costs in order to stay competitive and to be attractive to
their customers. As said by the interview partner, the majority of customers are
not willing to pay more just because a product is circular. Hence, a circular product
has to be comparable in features, price etc. with other conventional products of
a similar type. Circularity is an additional feature of a product but for the main
customer group it is not the crucial factor in their buying decision, as this quote
reveals: “But right now that’s not the case and we have to absorb those additional
costs. And we have to absorb them because we have to remain competitive. There are
not enough people that are willing to pay more.”
Another challenge identified by the organization Alpha is the lack of govern-mental support. According to the interview partner, externalities of the production
process should be internalized through appropriate policies. Air pollution, waste
generation or resource consumption are externalities which are currently not ad-
equately considered in the formulation of governmental policies. Internalization
would make products made in a ‘conventional’ way (with virgin resources so not in
line with the circular economy concept) more expensive and less attractive to the
customer. This challenge was explained by the interviewee as follows: “The t-shirt
that is made with cotton that is farmed using huge amounts of water and pesticides
is unsustainable. This t-shirt should cost more than a t-shirt that is made with cot-
ton grown organically, a cotton that is watered by rainfall only, a cotton that uses
non-toxic dye, a cotton that is reclaimed and recycled. This t-shirt should cost less.”
4.3.4 Economic Impacts
There are several economic impacts on the business of the organization as a result
of implementing changes to achieve a circular economy.
The first impact is the higher costs for recycled resources. These costs cannot bereflected in price of the product because the organization has to stay competitive.
The company has to absorb these additional costs, as explained in the following
quote: “We have to absorb additional costs. We have to absorb them because we need