Short answer
When designing products or systems for circular business models, tailor risk assessment and mitigation strategies to the specific circular strategy being implemented, as risks are not universal.
- Field
- Sustainability
- Source
- Business Strategy and the Environment (2023)
- Method
- Multiple-case study
- Sample
- 7 organizations
- Evidence
- Moderate effect
The perceived risks associated with adopting circular business models (CBMs) are not uniform and are heavily influenced by the specific CBM strategy employed. This sustainability research insight is drawn from a 2023 study published in Business Strategy and the Environment. Using Multiple-case study with 7 organizations, researchers explored how this design variable affects real-world outcomes. The key design takeaway: When designing products or systems for circular business models, tailor risk assessment and mitigation strategies to the specific circular strategy being implemented, as risks are not universal.
Circular Business Model Risks Vary Significantly by Strategy Type
The perceived risks associated with adopting circular business models (CBMs) are not uniform and are heavily influenced by the specific CBM strategy employed.
Business Strategy and the Environment · 2023
Key Findings
- 01Risks in CBM adoption are multi-disciplinary.
- 02Customer perception of circular products, economic cycles, and take-back systems are common risks across all CBM types.
- 03Supply and technological risks are prioritized for 'Circular Supplies' CBMs.
- 04Political and regulatory risks are prioritized for 'Product Life Extension' CBMs.
Application
Design takeaway
When designing products or systems for circular business models, tailor risk assessment and mitigation strategies to the specific circular strategy being implemented, as risks are not universal.
How to apply
Before launching a new product or service within a circular business model, conduct a detailed risk analysis that differentiates between risks inherent to 'Circular Supplies', 'Product Life Extension', or 'Hybrid' models.
Project actions
- 01When planning a design project involving circular economy principles, identify which type of circular business model you are aiming for.
- 02Research the specific risks associated with that type of model, not just general circular economy risks.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Cross-industrial case study provides a broader perspective.
- +Disaggregation of risks by CBM type offers specific insights.
Limitations
The number of organizations studied was small, and the focus was on composite materials, which might limit the broad applicability of the findings.
Reliability & validity
The use of a multiple-case study design enhances the external validity by examining multiple contexts. However, the reliance on perceived risks might introduce subjectivity, impacting reliability if not carefully managed through consistent data collection methods.
Think critically
How might the identified risks for 'Circular Supplies' and 'Product Life Extension' CBMs influence the material selection and design for durability in a composite product?
Design Principles
"Contextualize risk assessment within circular economy strategies."
Understanding these nuanced risks is crucial for designers and businesses aiming to implement circular economy principles. By identifying which risks are most prominent for different CBMs, organizations can proactively develop targeted mitigation strategies, increasing the likelihood of successful adoption and reducing potential setbacks.
What This Means for Your Design
Different ways of making products circular have different risks. For example, getting materials back is risky in one way, while making products last longer is risky in another.
How to use in your project
- 1.Use this research to justify why a particular risk mitigation strategy is chosen for your design project, linking it to the specific circular business model being explored.
Add to My Project
Quick Cite
Paragraph starter
This research highlights that the risks associated with adopting circular business models are highly dependent on the specific strategy employed. For instance, models focused on 'Circular Supplies' face greater supply and technological risks, while 'Product Life Extension' models are more susceptible to political and regulatory challenges. This understanding is critical for developing targeted risk mitigation plans within design projects aiming for circularity.
Source
Business Strategy and the Environment
Risks in circular business models innovation: A cross‐industrial case study for composite materials
journal · 2023
View sourceQuestions About This Research
- What does the research say about circular business model risks vary significantly by strategy type?
- When designing products or systems for circular business models, tailor risk assessment and mitigation strategies to the specific circular strategy being implemented, as risks are not universal. Evidence: Business Strategy and the Environment (2023).
- Why does "Circular Business Model Risks Vary Significantly by Strategy Type" matter for design?
- Understanding these nuanced risks is crucial for designers and businesses aiming to implement circular economy principles. By identifying which risks are most prominent for different CBMs, organizations can proactively develop targeted mitigation strategies, increasing the likelihood of successful adoption and reducing potential setbacks.
- How can designers apply this research?
- When designing products or systems for circular business models, tailor risk assessment and mitigation strategies to the specific circular strategy being implemented, as risks are not universal.
- What were the main findings?
- Risks in CBM adoption are multi-disciplinary.. Customer perception of circular products, economic cycles, and take-back systems are common risks across all CBM types.. Supply and technological risks are prioritized for 'Circular Supplies' CBMs.. Political and regulatory risks are prioritized for 'Product Life Extension' CBMs.
- What research method was used?
- Multiple-case study with 7 organizations.
- How strong is the evidence?
- Evidence strength is rated Moderate effect, based on a 2023 journal from Business Strategy and the Environment.
- What should I do differently in my next project?
- Before launching a new product or service within a circular business model, conduct a detailed risk analysis that differentiates between risks inherent to 'Circular Supplies', 'Product Life Extension', or 'Hybrid' models.
- What are the limitations?
- The study focused on composite materials and a specific set of CBM types, so findings may not be directly generalizable to all material types or all possible CBM configurations.