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Journal of Cleaner Production 277 (2020) 123741 Contents lists available at ScienceDirect...

Journal of Cleaner Production 277 (2020) 123741 Contents lists available at ScienceDirect Journal of Cleaner Production journal homepage: www.elsevier.com/locate/jclepro Review Circular business models: A review Martin Geissdoerfer a, *, Marina P.P. Pieroni b, Daniela C.A. Pigosso b, Khaled Soufani a a University of Cambridge, Circular Economy Centre, Judge Business School, Trumpington St, Cambridge, CB2 1AG, United Kingdom b Technical University of Denmark (DTU), Department of Mechanical Engineering, Nils Koppels Alle 404 / Room 231, DK- 2800, Kgs, Lyngby, Denmark a r t i c l e i n f o a b s t r a c t Article history: The Circular Economy is gaining traction in academia, industry, and policy making as an alternative Received 9 November 2019 model that minimises resource depletion, waste, and emissions. To implement the concept on the Received in revised form organisational level, business models are an important leverage. A body of literature has emerged 30 July 2020 investigating the notion of circular business model and circular business model innovation, however, Accepted 11 August 2020 Available online 22 August 2020 there is considerable lack of clarity about their theoretical conceptualisation. To address this and sys- tematise the state-of-the-art of the nascent field of circular business models and circular business model Handling editor M.T. Moreira innovation, we have reviewed this literature, employing systematic database searches and cross- reference snowballing. Our contributions to conceptual clarity are: (1) an overview of the history of Keywords: the concepts of circular business model and circular business model innovation, (2) an overview and Circular business model synthesis of definitions of circular business model and circular business model innovation, and (3) an Business model innovation overview and synthesis of conceptual frameworks for circular business model and circular business Sustainable business model model innovation. Circular economy © 2020 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license Review (http://creativecommons.org/licenses/by/4.0/). Contents 1. Introduction........................................................................................................................ 1 2. Background......................................................................................................................... 2 2.1. The circular economy.......................................................................................................... 2 2.2. Business model innovation...................................................................................................... 3 3. Research methodology............................................................................................................... 4 4. Literature review results............................................................................................................. 5 4.1. History of the circular business model concept.................................................................................... 5 4.2. Definition..................................................................................................................... 5 4.2.1. Circular business models............................................................................................... 6 4.2.2. Circular business model innovation...................................................................................... 7 4.3. Conceptual frameworks........................................................................................................ 8 5. Discussion........................................................................................................................ 10 6. Conclusions....................................................................................................................... 13 Declaration of competing interest..................................................................................................... 13 Acknowledgements................................................................................................................ 13 Supplementary data................................................................................................................ 13 Workshop poster version of Fig. 5.................................................................................................... 13 References......................................................................................................................... 15 1. Introduction * Corresponding author. The notion of a circular economy has gained prominence on the E-mail addresses: [email protected] (M. Geissdoerfer), [email protected] (M.P.P. Pieroni), [email protected] (D.C.A. Pigosso), [email protected] agendas of policymakers around the world (Brennan et al., 2015), (K. Soufani). resulting, for example, in the European Circular Economy package https://doi.org/10.1016/j.jclepro.2020.123741 0959-6526/© 2020 The Author(s). Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/). 2 M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 (European Commission, 2015) and the Chinese Circular Economy literature review of the circular business models and business Promotion Law (Lieder and Rashid, 2016) and attracted consider- model innovation concepts, employing systematic string-based able attention from the private sector (Esposito et al., 2016), which database searches and cross-reference snowballing. lead to a range of initiatives by major companies, such as Google, As a result, we identified definitions of key underlying concepts Renault and Unilever (Bocken et al., 2017). The concept has also around circular business model and circular business model inno- become an important field of academic research with a consider- vation and proposed a synthesised definition for both concepts. able increase in articles and journals that cover this topic in the last Additionally, we proposed a conceptual framework to advance the decade (Geissdoerfer et al., 2017). discussions of the multiple boundaries of analysis adopted for For industrial practitioners, business model innovation is seen business model innovation (i.e. organisational, inter-organisational, as key leverage to implement the circular economy on the organ- ecosystem), which is intensified within the circular economy scope. isational level, as it allows for a systemic shift in the core logic of Lastly, we consolidated a conceptual framework explaining how businesses and the alignment of incentives of different stakeholder different circular business model strategies (i.e. close, slow, inten- groups (Rashid et al., 2013; Schulte, 2013). A circular economy sify, dematerialise) affect the elements or components of business system requires the design and implementation of business models models’ structures (i.e. value proposition, value creation & delivery, that are based on using as little resources for as long as possible, and value capture). while extracting as much value as possible in the process. Organi- This paper is structured in six sections: After this introduction, sations that are willing to adopt the circular economy model need section 2 reviews the concepts of circular economy and business to implement new types of business models by rethinking value model innovation underlying this research. Section 3 explains the propositions and developing value chains that offer feasible cost research methodology, section 4 presents the results of the litera- efficiency, production effectiveness, and business performance ture review, and section 5 provides a discussion about the results. (Rashid et al., 2013; Schulte, 2013). As a result, research about The paper concludes with final remarks in section 6. business model innovation related to the circular economy has For better readability, we avoid abbreviations, but will use CE for received increasing attention in the past five years (Diaz Lopez circular economy, BM for business model, BMI for business model et al., 2019). innovation, CBM for circular business model, CBMI for circular Despite the importance of the circular business model notion, business model innovation, SBM for sustainable business model, there is considerable lack of clarity about its theoretical con- and SBMI for sustainable business model innovation where ceptualisation and position in economic and operations literature. appropriate, for example in tables and figures with space con- Recent research calls for the establishment of consensual founda- straints. Terms that are identical in substance, such as circular tions (e.g. definitions) and a shared conceptual framework to sup- business models and business models for circular economy are port practitioners with the design and implementation of a circular used synonymously. business models and also the execution of a circular business model innovation (Pieroni et al., 2019a; Rosa et al., 2019). In particular, a 2. Background conceptual framework is required to clarify which specific practices for value proposition, value capture, value delivery (i.e. customer The circular business model notion is based on two underlying involvement) and value creation (i.e. supply chain management) concepts: the circular economy and business model innovation. can enable different circular business models (Rosa et al., 2019). To This section shortly introduces both topics. the best of our knowledge, existing reviews in the field barely address the conceptualisation of circular business models and cir- 2.1. The circular economy cular business model innovation, as most of them focus on the overall conceptualisation of a circular economy itself (more details The concept of the circular economy is influenced by Boulding’s in Table 1 of section 2.1). Moreover, existing reviews about circular (1966) work. He argued that for the economy and the environment business models or circular business model innovation focus on to coexist in equilibrium, the Earth should be seen as a desirable specific approaches or tools (Bocken et al., 2019; Pieroni et al., closed-loop system (or closed spaceship economy in his words) with 2019a; Rosa et al., 2019), but not in their theoretical limited assimilative capacity. Stahel and Reday (1976) also intro- conceptualisation. duced certain features of a circular economy, with a focus on in- To address this gap, this research aims to systematise the state- dustrial economics. They conceptualised a loop economy to of-the-art of circular business models and circular business model describe industrial strategies for waste prevention, regional job innovation to increase conceptual clarity and the efficacy of the creation, resource efficiency, and dematerialisation of the industrial concepts’ use in theory and practice. Therefore, we conducted a economy. Stahel (1982) also emphasised that selling utilisation Table 1 Reviews about circular economy. Publication Focus Andersen (2007) Introduction to fundamental principles and approaches in environmental economics relevant for CE. Su et al. (2013) Analysis of CE concept and research in China. Ghisellini et al. (2016) Analysis of CE literature and exploration of its origins, basic principles, advantages, disadvantages, modelling and implementation. Lieder and Rashid (2016) Analysis of CE literature and exploration of different ideas relevant to CE and their recurrence in the context of manufacturing companies. Sauve
et al. (2016) Comparison of CE, environmental sciences and sustainable development concepts. Geissdoerfer et al. (2017) Comparison of CE and sustainability concepts. Blomsma and Brennan (2017) Analysis of the emergence and evolution of the CE concept. Murray et al. (2017) Exploration of the CE concept based on an interdisciplinary perspective. Kirchher et al. (2017) Conceptualisation of CE through review of 114 CE definitions. Merli et al. (2018) Analysis of the CE phenomenon and characterisation of the literature. Turkeli etv al. (2018) Analysis of the evolution of CE research in European Union and China. Homrich et al. (2018) Analysis of trends and gaps of the CE literature.  M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 3 instead of ownership of goods is a relevant business model for a 2.2. Business model innovation loop economy, allowing industries to profit while reducing or minimising costs and risks associated with waste. The business model concept gained popularity and started The contemporary understanding of a circular economy system, evolving into its modern interpretation during the dot.com boom introduced by Pearce and Turner (1989), incorporates different of the 1990’s (Wirtz et al., 2010), when innovative revenue features and contributions from a variety of concepts that share the mechanisms were introduced. In this context, the business model idea of closed loops, such as: industrial ecology (Graedel and concept was originally used to communicate complex business Allenby, 1995), cradle-to-cradle (McDonough and Braungart, ideas to potential investors within a short time frame (Zott et al., 2002), laws of ecology (Commoner, 1971), looped and perfor- 2011). mance economy (Stahel, 2010), regenerative design (Lyle, 1994), From this basic function, the business model concept evolved biomimicry (Benyus, 2002), the blue economy (Pauli, 2010) and life into both a (i) tool for systemic analysis, planning, and communi- cycle management and engineering (Niero et al., 2017; Hauschild cation (Knyphausen-Aufseß and Meinhardt, 2002; Doleski, 2015), et al., 2005). The Important roles in framing and popularising the as well as a (ii) strategic asset for competitive advantage and firm concept in its contemporary curated form was played by Ellen performance (Afuah, 2004; Casadesus-Masanell and Ricart, 2010; MacArthur Foundation supported by the consultancy McKinsey, Chesbrough, 2007; Hamel, 2000; Magretta, 2002). who co-authored a range of seminal and influential reports on the The capability to quickly and successfully innovate and intro- topic (EMF, 2012, 2014, 2015). duce business models can create an important competitive Since 2013, the circular economy concept has received advantage for organisations, due to falling returns on technology increasing attention in academia with a range of reviews on the (Chesbrough, 2007), growing complexity (Jensen, 1997), and falling topic (Table 1) and a special issue in California Management Review cost of capital (Mankins et al., 2017). This might be amplified (2018, Volume 60, Issue 3). through the increasing disruption of digital transformation This resulted in a range of different definitions of the concept. (Christensen and Overdorf, 2000; Berman, 2012; Andal-Ancion For example, Yuan et al. (2008) state that “the core of [circular et al., 2004), as indicated by the considerable market valuation of economy] is the circular (closed) flow of materials and the use of relatively new tech conglomerates with innovative digital BMs raw materials and energy through multiple phases”. Webster (Parker et al., 2017). (2015) adds that “a circular economy is one that is restorative by Business model innovation capabilities are not only potentially design, and which aims to keep products, components and mate- leading to yield higher returns than product or process innovations rials at their highest utility and value, at all times”. Bocken et al. (Lindgardt and Reeves, 2015; Chesbrough, 2007), but might prove (2016, p.309) categorise the characteristics of circular economy by to become a ‘renewable’ competitive advantage. Business model defining it as “design and business model strategies [that are] innovation capabilities can trigger a dynamic sustainable compet- slowing, closing, and narrowing resource loops”. itive advantage for companies (Casadesus-Masanell and Zhu, 2013; Kirchherr et al. (2017) reviewed 114 definitions for the circular Slocum et al., 1994; Afuah, 2004; Magretta, 2002; Chesbrough, economy and, based on their analysis, proposed a new definition: 2007), which further increases their importance for organisa- “A circular economy describes an economic system that is based on tional strategy (Richardson, 2008; Teece, 2010; Casadesus-Masanell business models, which replaces the ‘end-of-life’ concept with and Ricart, 2010). reducing, alternatively reusing, recycling and recovering materials Business model innovation is also critical for organisations to in production/distribution and consumption processes, thus oper- meet their social and environmental ambitions by leveraging ating at the micro level (products, companies, consumers), meso environmentally, socially, and economically effective technologies level (eco-industrial parks) and macro level (city, region, nation and and solutions (Boons and Lüdeke-Freund, 2013; Geissdoerfer et al., beyond), with the aim to accomplish sustainable development, 2016; Rashid et al., 2013). Companies engaged in sustainable which implies creating environmental quality, economic prosperity business model innovation can improve their financial, social, and and social equity, to the benefit of current and future generations”. environmental performance (Nidumolu et al., 2009; Porter and However, a previous review of circular economy literature Kramer, 2011) and improve resilience and exposure to risks from (Geissdoerfer et al., 2017) reveals a range of shortcomings for this their environment (Evans et al., 2009; Freeman, 1984). definition. For example, the definition simplifies the term ‘end-of- The business model innovation concept has also received life’ to ‘disposal’, disregarding the more common, broader inter- increasing attention in academia with a range of reviews on the pretation adopted by product development theory, has a reduced topic, like Bieger and Reinhold (2011), George and Bock (2011), Zott focus on other lifecycle stages, specifies a three-tier level system et al., (2011), Massa et al. (2017), Schallmo (2013), Spieth et al. that simply translates into ‘all levels’, and puts an undue focus on (2014), Wirtz et al. (2016), Foss and Saebi (2017), and an exten- sustainability aspects not always included in the circular economy sive special issue in the Long Range Planning journal (2010, Volume concept. 43 Issue 2e3). Therefore, we have revisited the 114 definitions and adapted an This resulted in a range of different definitions of the concept, as older definition by the authors (Geissdoerfer et al., 2017, p. 759). For exemplified in Table 2. this research, we will define circular economy as an economic sys- For this research we use an earlier definition by the authors, tem in which resource input and waste, emission, and energy leakages based on a comprehensive review of the field: business model are minimised by cycling, extending, intensifying, and dematerialising innovation is “the conceptualisation and implementation of new material and energy loops. This can be achieved through digitalisation, business models that can comprise the development of entirely servitisation, sharing solutions, long-lasting product design, mainte- new business models, the diversification into additional business nance, repair, reuse, remanufacturing, refurbishing, and recycling. We models, the acquisition of new business models, or the trans- have illustrated the definition in Fig. 1. formation from one business model to another. The transformation Since a completely closed-loop system is not theoretically can affect the entire BM or individual or a combination of its value possible (Zotti and Bigano, 2019; Skene, 2018), our understanding proposition, value creation and deliver, and value capture elements, of a circular economy refers to a dynamic perspective - ‘going cir- the interrelations between the elements, and the value network.” cular’ rather than a static perspective of a (impossible) fully circular (Geissdoerfer et al., 2018b). system in which no leakage of materials and energy occurs. 4 M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 Fig. 1. The circular economy. Table 2 Selected business model innovation definitions. Publication Definition Mitchell and Coles “business model replacements that provide product or service offerings to customers and end users that were not previously available. [And] refer (2004) to the process of developing these novel replacements as business model innovation” (p. 17) Osterwalder et al. “specifying a set of business model elements and building blocks, as well as their relationships to one another […] a business model designer […] (2005) can experiment with these blocks and create completely new business models” (p. 24) Chesbrough (2007) “advance [the] business model […] from very basic (and not very valuable) models to far more advanced (and more valuable) models” (p.15) Johnson (2010) “the ability to innovate something more core than the core, to innovate the very theory of the business itself. I call that process business model innovation” (p. 13) […] “business model innovation is an iterative journey” (p. 114) 3. Research methodology were scanned also followed the same selection criteria described above to determine whether the publications were relevant to be To contribute to reducing the conceptual lack of clarity in the included into the sample. The same snowballing procedure was circular business model innovation literature by means of knowl- applied to the added publications, which was continued until no edge systematisation, this research is based on a systematic liter- further relevant publications were identified. Thus, 21 publications ature review organised in a three-step protocol: data search, data identified through snowballing were added to the sample, which analysis and report (de Almeida Biolchini et al., 2007). increased the final sample to 51 publications. Data search encompassed two steps. First, the search string The data analysis part employed content analysis and coding TITLE-ABS-KEY (“circular*” AND “business model*“) was applied to techniques (Dresch et al., 2015) to categorise publications according search for journal articles and reviews in English on the Elsevier to the topics of interest for this literature review: Scopus database. Abstracts of identified publications (207 as of May 2019) were scanned to define an initial sample of relevant literature i) History of the circular business model and circular business composed of 30 articles for full text reading according to two se- model innovation concepts (H): divided into seven sub- lection criteria (see Supplementary Materials for details): groups representing correlated research areas (i.e. business model innovation; performance economy; cradle-to-cradle; i. Circular business model or circular business model innovation sustainable business model innovation; circular business are explicitly addressed as one of the main topics of study; model innovation; product-service systems; and digital- ii. Conceptual contributions that explicitly address items on the isation) that emerged throughout the analysis. scope of this study (i.e. reviews, definitions, schools of thought/ ii) Definitions of the concepts (D): divided into two sub-groups origins, characteristics/types/conceptual frameworks). e i.e. circular business model and circular business model innovation definitions; As a second step, a backward snowballing approach (Wohlin, iii) Conceptual frameworks for circular business models (F): 2014) was performed to capture established and also conceptual divided into three sub-groups representing types of concep- knowledge falling outside of the database searches or originated tual frameworks (i.e., reference models; requirements; and prior to the establishment of the contemporary concept of circular classifications) based on a previous publication (Pieroni et al., economy. References of the initial selected sample were screened 2019a) and explained in section 4.3. and articles were selected according to their relevance (based on their title and content) and following the same selection criteria Data reporting consisted of integrating, synthesising and described above. Abstracts of the identified additional publications compiling analyses in the following reported results (section 4).  M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 5 4. Literature review results Braungart, 2002) and Performance Economy (Stahel, 2010) already addressed the notion of circular business models even before or This section introduces the review’s results in four sub-sections. simultaneously to the emergence of the modern version of the After an overview of the history of circular business model inno- business model concept (as considered in this study) (Wirtz et al., vation sub-stream (section 4.1), definitions of circular business 2016) or the establishment of business model innovation as a model and circular business model innovation (section 4.2) and field of research (Foss and Saebi, 2017). Likewise, the sub-field of conceptual frameworks (section 4.3) are presented. sustainable business model innovation, which emerged in the late 2000’s (Birkin et al., 2009; Stubbs and Cocklin, 2008; Lüdeke- Freund and Dembek, 2017), considers circular business models 4.1. History of the circular business model concept (e.g. create value from waste) as one archetype or sub-category of sustainable business models (Bocken et al., 2014), with a narrower The concept of circular business model emerged considerably primary focus on environmental and economic outcomes more recently than the circular economy literature as a whole. As (Geissdoerfer et al., 2018a). illustrated in Fig. 2, the term first appeared in 2006 in an article by Another co-related field is product-service-systems (PSS), which Schwager and Moser (2006) that explored individual business started around 1990’s with an environmental approach (Tukker, model types for circular value creation. 2004; Mont, 2002), but after 2010 gained a more economic focus The circular business model concept re-emerged seven years (Haase et al., 2017), coincidently with the dissemination of the later, coinciding with the broader dissemination of the circular overlapping servitisation theory (Baines et al., 2009; Rabetino et al., economy notion by the Ellen MacArthur Foundation and the World 2018). Recently, the focus on the environmental perspective of PSS Economic Forum (WEF, 2014; EMF, 2012). Rashid et al. (2013) seems to be approached more frequently with some dedicated re- pointed to business model as an answer to incentivise alignment views (Tukker, 2015; Annarelli et al., 2016) and CE-related research issues that explain the slow uptake of rapidly advancing technol- (Yang et al., 2018; Pieroni et al., 2019b). This is probably propelled ogies that would enable recycling a broad range of products and by the boost of CE-oriented research. Reviews about business materials. Similarly, Schulte (2013) advocated the role of business model innovation in the context of PSS have also appeared as in models for the “circular economy to flourish in the long run”. Ac- Reim et al. (2015). From the environmental perspective, PSS-related cording to him, businesses should interpret and approach circular business model innovation could be considered a ‘narrower’ economy as a new way of making profit, instead of a tool to increase approach than CE-related business model innovation, i.e., PSS- companies’ resilience by protecting against raw materials’ prices related business models could represent types or a sub-category volatility. of circular business models. Since 2015, publications have grown exponentially, with 13 ar- Lastly, modern parallel theories, such as digitalisation, have also ticles in 2016, 38 in 2017, and 88 in 2018. This rise in interest is also been studied in relation to business model innovation and product- confirmed by parallel reviews on the topic (Diaz Lopez et al., 2019; service systems, and can work as an enabler of business models’ Pieroni et al., 2019a; Bocken et al., 2019; Rosa et al., 2019) and could transformation towards enhanced circularity, related to predictive be associated with the increasing availability of dedicated research maintenance and product tracking (Parida et al., 2019; Bressanelli funding (Pieroni et al., 2019a) and high citation counts in this et al., 2018). relatively small time scale. For instance, the three most cited papers in our sample, Geissdoerfer et al., (2017), Murray et al., (2017) and Bocken et al. (2016) are all published in the last three years and 4.2. Definition have already received 235, 160, and 145 citations respectively. Despite the recent history of the circular business model This section analyses how the concepts of circular business concept as an independent stream of research (Nubholz, 2017), models and circular business model innovation are defined in the some ideas related to the concept were already being addressed in literature and synthetises a unified definition based on this parallel fields for a longer period. Cradle-to-cradle (McDonough and analysis. Fig. 2. Development of circular business model journal articles and reviews published over time. Source: Elsevier Scopus database. 6 M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 Table 3 Selected circular business model definitions. Publication Definition Comments Mentink (2014) “A circular business model is the rationale of how an organisation A widely cited Master’s thesis, simply combines Osterwalder and creates, delivers and captures value with and within closed material Pigneur’s (2010, p.14) BM definition with a simplistic CE definition. loops” (p.24) Roos (2014) “A circular value chain business model (or green business model) is one Focuses on selling waste. It remains unclear how the waste that is not in which all intermediary outputs that have no further use in the value used in value creation activities can reduce costs. creating activities of the firms are monetised in the form of either cost reductions or revenue streams” (p. 257) Bocken et al. (2016) “business model strategies suited for the move to a CE [based on the] Not explicit referred to as a definition by the authors. taxonomy of slowing, closing, and narrowing resource loops” (p. 317) Den Hollander and “A circular business model describes how an organisation creates, The authors emphasise the role of product obsolescence and include Bakker (2016) delivers, and captures value in a circular economic system, whereby the Richardson’s (2008) value logic twice in one sentence, illustrating its business rationale needs to be designed in such a way that it prevents, central role in the conceptualisation of CBMs. postpones or reverses obsolescence, minimises leakage and favours the use of ‘resources’ over the use of resources in the process of creating, delivering and capturing value” (p. 2) Linder and Williander “We define a circular business model (CBM) as a business model in Only addresses the “closing resource loops” strategy. Assumes that a (2017) which the conceptual logic for value creation is based on utilising CBM “always involves” re-X strategies. economic value retained in products after use in the production of new offerings. Thus, a circular business model implies a return flow to the producer from users, though there can be intermediaries between the two parties. The term circular business model therefore overlaps with the concept of closed-loop supply chains, and always involves recycling, remanufacturing, reuse or one of their sibling activities (e.g. refurbishment, renovation, repair)” (p. 183) Nubholz (2017) “A circular business model is how a company creates, captures, and Builds on Den Hollander and Bakker (2016) and Bocken et al. (2016) delivers value with the value creation logic designed to improve definitions. Mixes closing and slowing resource loops. resource efficiency through contributing to extending useful life of products and parts (e.g., through long-life design, repair and remanufacturing) and closing material loops” (p. 12) Urbinati et al. (2017) “i.e. different modes of adoption of CE by […] single firms […] as they Uses single firm as unit of analysis. It remains unclear if the authors only adopt any of the circular practices (e.g., redistribution and reuse, address the “closing resource loops” strategy. remanufacturing or recycling of products) in their internal activities” (p. 487) Geissdoerfer et al. “CBM can be defined as SBMs [sustainable business models] - which are Earlier definition by the authors. Assumes that CBMs are a subcategory of (2018a) business models that aim at solutions for sustainable development by SBMs. creating additional monetary and nonmonetary value by the pro-active management of a multiple stakeholders and incorporate a long-term perspective - that are specifically aiming at solutions for the CE [i.e. closing, narrowing, slowing, intensifying, and dematerialising resource loops] through a circular value chain and stakeholder incentive alignment” (p. 713f) Lahti et al. (2018) “we propose a circular business model definition to explain how an Focuses on use of innovations. Integrates stakeholder management and established firm uses innovations to create, deliver, and capture value assumes triple bottom line benefits or SBM characteristics. through the implementation of CE principles, whereby the business rational are realigned between the network of actors/stakeholders to meet environmental, social, and economic benefits” (p. 3) Manninen et al. (2018) “CE businesses aim to apply [the] CE principles […] preserving and Comprises “enhancing natural capital”, although it remains unclear what enhancing natural capital, optimising yields from resources in use, and this implies. fostering system effectiveness (minimising negative externalities) […] to their business models and shift from a linear business to more circular one” (p. 414) Oghazi and Mostaghel “The rationale of how an organisation creates, delivers, and captures Combines Bocken et al. (2016) with Richardson (2009) without referring (2018) value with slowing, closing, or narrowing flows of the resource loops” (p. to either. 3) Lüdeke-Freund et al. “as a means to redefine how companies create value while adhering to Synthesised from a range of other sources. It remains unclear what (2019) CE principles” (p. 37) “redefine” implies in this context. Ünal et al. (2019) “A circular business model represents a holistic system of co-evolving Focuses on managerial practices and assumes sustainable development managerial practices for collective value creation, delivery and capture, benefits or SBM characteristics. which provide solutions for sustainable development” (p. 291) Zucchella and Previtali “The business model’s key role is to incorporate the CE principles into a Assumes SBM characteristics. Might describe the purpose rather than the (Zucchella and design or redesign of business activities and partnerships and to create a concept itself. Previtali, 2019) cost and revenue structure, which is compatible both with sustainability and with profitability” (p. 275) 4.2.1. Circular business models reflected in a diverse range of definitions, as exemplified in There is a range of understandings of the circular business Table 3. models or business models for the circular economy concept All but two1 of the reviewed definitions focus on value creation and roughly follow either the value logic framework of Richardson (2008), which envisions the value proposition, value creation and delivery, and value capture (e.g. Linder and Williander (2017), 1 Urbinati et al. (2017) refer to CE practices (e.g. recycling and reuse) and Nußholz (2017), and Lahti et al. (2018)), or the business model Manninen et al. (2018) refer to the related concept of Natural Capital instead.  M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 7 Fig. 3. Circular business model strategies, developed from Bocken et al. (2016) and Geissdoerfer et al. (2018a,b). definition of Osterwalder and Pigneur (2010), which is based on purchasing cost enables a viable way to increase productivity that logic: “A business model describes the rationale of how an through automatisation (Bi et al., 2015). organisation creates, delivers, and captures value” (p.14). Extending resource loops implies that the use phase of the This is then combined with circular economy principles product is extended, through long-lasting and timeless design, (Manninen et al., 2018; Lüdeke-Freund et al., 2019; Zucchella and marketing that encourages long use phases, maintenance, and Previtali, 2019) or translated into circular business model strate- repair. For example, Patek Philip builds upmarket mechanical gies by Bocken et al. (2016), Geissdoerfer et al. (2018a,b), and watches that last for a long time and have a timeless design that has Oghazi and Mostaghel (2018). These comprise recycling measures not changed considerably over the past decades. A marketing (closing), efficiency improvements (narrowing), use phase exten- campaign supports this with the slogan “you never actually own sions (extending), a more intense use phase (intensifying), and the [this watch]. You merely look after it for the next generation” (Naas, substitution of product utility by service and software solutions 2015). (dematerialising) (Geissdoerfer et al., 2018a,b). Intensifying resource loops implies that the use phase of the However, while all of these strategies seem compliant with the product is intensified through solutions such as sharing economy circular economy as conceptualised for example by Webster (2015), (Hamari et al., 2016) or public transport (van de Velde, 1999). For we could not find any source that would justify a business model to example, car sharing can reduce idle times of cars and driven qualify as ‘circular’ (Urbinati et al., 2017) or compliant with the mileage per user significantly compared to a conventional circular economy concept solely based on the idea of narrowing ownership-based system (Prettenthaler and Steininger, 1999). loops (i.e. efficiency gains alone). Thus, this strategy seems to Dematerialising resource loops describes the provision of prod- constitute more of an ‘add-on’ than a circular business model uct utility without hardware through substitution with service and strategy in its own right. software solutions. For example, offering services or product- Some authors highlight the relationship between circular and service systems instead of physical products to fulfil the same sustainable business models. Geissdoerfer et al. (2018a,b), Lahti function for the user can reduce the number of produced products et al. (2018), and Zucchella and Previtali (2019) assume sustain- while enhancing the customer experience at the same time (Tan ability aspects to be integral to the circular business model et al., 2010). Nevertheless, the product-service system has to be concept. This corresponds to a previous analysis carried by the purposefully designed for resource decoupling, otherwise it could authors that some but not all conceptualisations of circular generate undesired or rebound effects that could trigger resource business models focus on sustainability aspects (Pieroni et al., consumption increase (Pieroni et al., 2019b; Laumann et al., 2016; 2019a). Kjaer et al., 2019). Based on this analysis of the literature, circular business models “Organisational system” deliberately allows for different can be defined as business models that are cycling, extending, possible units of analysis, from the business unit to the ecosystem, intensifying, and/or dematerialising material and energy loops to depending on the descriptive or analytical task at hand. We have reduce the resource inputs into and the waste and emission leakage included a comprehensive discussion on the different units of out of an organisational system. This comprises recycling measures analysis and the ongoing shift in the literature in the discussion (cycling), use phase extensions (extending), a more intense use phase (Section 5). (intensifying), and the substitution of products by service and software solutions (dematerialising). 4.2.2. Circular business model innovation The second half of the definition describes the four generic There is a considerably smaller range of definitions for circular strategies for circular business models identified in the literature: business model innovation or business model innovation for the (1) cycling; (2) extending; (3) intensifying; and (4) dematerialising, circular economy. Most of these definitions are rather simplistic, which we have illustrated in Fig. 3. such as a “shift from a linear to more circular business model.” Cycling means that materials and energy are recycled within the (Bocken et al., 2018, p. 80), “a shift from a linear business model to a system, through reuse, remanufacturing, refurbishing, and recy- circular business model” (Linder and Williander, 2017, p. 194) or cling. For example, decommissioned industrial robots can be reused “shifting from a linear to a circular production or business model” in small and medium enterprises (SMEs), where their reduced (Rizos et al., 2016, p. 3). 8 M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 A more comprehensive definition was provided by the authors in a previous paper. Here, based on the work by Bocken et al. (2016), Den Hollander, and Bakker (2016) we concluded that “CE-oriented business model innovation incorporates principles or practices from circular economy as guidelines for business model design. It aims at boosting resource efficiency and effectiveness (by nar- rowing or slowing energy and resource loops) and ultimately closing energy and resource flows by changing the way economic value and the interpretation of products are approached” (Pieroni et al., 2019a, p.201). Some authors discuss the business model innovation and the interchangeably used business model transformation concept in the context of the circular economy (e.g. Bocken et al., 2016; Lewandowski, 2016; Linder and Williander, 2017) this seems to be consistent with how the circular business model concept is being based on the business model concept by nearly all authors in our sample. We can therefore assume that the circular business model innovation concept is related to the business model innovation concept in the same way as circular business models are related to business models. This allows us to define the concept based on the previously synthesised definition of circular business models and the definition of business model innovation used in this research (see Section 1.2). Consequently, circular business model innovation can be defined as the conceptualisation and implementation of circular business models, which comprises the creation of circular start-ups, the diver- Fig. 4. Four types of circular business model innovation, developed from Geissdoerfer sification into circular business models, the acquisition of circular et al. (2018a,b). business models, or the transformation of a business model into a circular one. This can affect the entire business model or one or more of while also diversifying their portfolio with the outputs of an in- its elements, the interrelations between the elements, and the value ternal business building unit. They could also divest from their core network. business towards this new portfolio or leverage acquisitions to The second half of the definition describes the four different introduce circular economy capabilities to transform their core types of circular business model innovation identified in the liter- business model (see also Geissdoerfer, 2019). ature: (1) circular start-ups; (2) circular business model diversifi- cation; (3) circular business model transformation; and (4) circular 4.3. Conceptual frameworks business model acquisition, which we have illustrated in Fig. 4. This section analyses the different conceptual frameworks for 1) Circular business model transformation describes the modifica- circular business models and circular business model innovation tion of an existing business model. While the initial business available in literature, and compares them with the objective of model can be either both conventional or circular the resulting synthesising their differences and contributions. business model incorporates circular economy strategies. The range of conceptual frameworks identified in the literature 2) Circular start-ups refer to the creation of new business models (detailed overview in Table 4) were organised in three different that incorporate circular economy strategies (i.e. cycling, types of frameworks (based on the categories from Pieroni et al. extending, intensifying, and/or dematerialising resource loops) (2019a)): outside of an existing company - with their own brand, em- ployees and resources - although they can be supported by non- i) Reference models: tools or visual frameworks used to repre- independent institutions, such as incubators or accelerators. sent a circular business model in terms of its elements (e.g. 3) Circular business model diversification describes the develop- revenue mechanism, customer segments); ment of new business models that incorporate circular economy ii) Requirements: generic descriptions of which elements are strategies from within an existing organisation e using their required to be altered in companies’ existing business resources and network. The current business model of the models to make them circular; parent organisation stays in place and the new business models iii) Classifications: categorisations of potential structures or are either integrated into the organisation as new businesses or configurations of circular business models, i.e., how a circular spun-off as subsidiaries. This also includes joint business model business model should look like. This includes typologies, innovation projects with other organisations. taxonomies or morphological charters. 4) Circular business model acquisition describes merger and acqui- sition (M&A) activities that target business models that incor- Reference models: Following the pattern identified in the defi- porate circular economy strategies. It comprises the nitions section (sub-section 4.2), all reference models for repre- identification, acquisition, and integration of new circular senting circular business models have their elements structured business models. The extent of integration can vary. around the ‘value concept’, building on the Value Logic framework (Richardson, 2008) or the Business Model Canvas (BMC) Organisations can also combine different strategies, for (Osterwalder and Pigneur, 2010) (see Table 4 for the indication of example, support start-ups with an incubator programme and ac- which approach was adopted by each reference model). From this quire successful participates for their business model portfolio, anchor point the different frameworks can be classified as either  M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 9 Table 4 Conceptual frameworks for circular business models. Type Publication “Name” and description Reference models Mentink (2014) “Business Cycle Canvas (BCC)”: building on the Business Model Canvas (Osterwalder and Pigneur, 2010), this tool spans the organisational boundaries to support companies to design the business cycle, which is a CE system of several actors in the value chain to close a material loop. The focus is on the network view and collaboration. Antikainen and “Framework for Sustainable Circular Business Model Innovation”: this is an elements-based diagram Valkokari (2016) inspired by the Business Model Canvas (BMC) (Osterwalder and Pigneur, 2010). It contains fourteen elements, differing from the BMC as:
Some elements were expanded: “stakeholders” instead of “customer relationships”; “reverse logistics” was added to “channels”;
New elements were added: “trends and drivers”; “stakeholder involvement”; “sustainability impacts”; “sustainability benefits”; and “sustainability and circularity evaluation”. Lewandowski “Circular Business Model Canvas (CBMC)”: this is an elements-based diagram inspired by the BMC (2016) (Osterwalder and Pigneur, 2010). It contains eleven elements, differing from the BMC as:
New elements were added: “take back systems”; “adoption factors”;
A definition of new relationships between the elements was proposed;
Predefined attributes (or options) to fill in the BM elements were suggested. For instance, options for defining the element value proposition in a CBM are PSS, Circular Product, Virtual Service, Incentives for customer Take-Back. Bocken et al. (2018) “Adapted sustainable business model canvas”: this is an elements-based diagram inspired by the value logic (Richardson, 2008) and the BMC (Osterwalder and Pigneur, 2010). It contains eight elements, differing from the BMC as:
The value proposition was divided in three categories for “Profit, People and Planet”;
Single or several elements were adjustment, reorganised or extended. Nubholz (2018) “Circular business model mapping tool”: this is an elements-based diagram inspired by the value logic (Richardson, 2008) and the BMC (Osterwalder and Pigneur, 2010). It contains ten elements, differing from the BMC as:
A new element was added: ‘offer’;
A matrix structure to analyse the BM elements throughout different life-cycle stages was proposed;
Single or several elements were adjustment, reorganised or extended. Requirements Aminoff et al. They present a framework showing the required generic changes in value creation and delivery, value (2017) capture, and value proposition for shaping CBMs. Classifications (typologies, taxonomies, Bocken et al. (2016) They present a framework describing CBM strategies and types, matching them with product design morphological charters) strategies for CE, and accompanying case studies. Six CBM types according to different strategies were described:
Slowing loops: “access and performance models”; “extending product value”; “classic long-life model”; “encourage sufficiency”.
Closing loops: “extend resource value”, “industrial symbiosis”. Moreno et al. (2016) They present a framework to link CBM archetypes and circular product design strategies. Five CBM archetypes were systematised from previous literature and had their contribution to value flows (e.g. strategies) outlined:
Slowing resource loops: “sharing platforms”, “extending product value”
Cycling for longer: “product life extension”
Cascaded uses or narrowing resource flows: “resource value”, “circular supplies” Urbinati et al. They propose a taxonomy for CBMI based on the degree of adoption of circularity and changes promoted in (2017) the business models of companies. The taxonomy contains three categories:
“Downstream circular”: CBMI driven by altering value capture and delivery sub-models of the business model, through new revenue schemes and customer interface e e.g. pay-per-use models.
“Upstream circular”: CBMI driven by changing value creation sub-model of the business model - e.g. reverse logistics, product design.
“Fully circular”: combines upstream and downstream categories, i.e., all sub-systems of the business model are changed to promote the CBMI. Geissdoerfer et al. They propose a framework describing CBM strategies, which builds on Bocken et al. (2016) and expands CBM (2018a) strategies proposed by the former by including “intensifying” and “dematerialising” in addition to “narrowing”, “slowing” and “closing loops”. Planing (2018) They systematise a CBM typology with nine archetypes based on previous literature: “Access model/ collaborative consumption”; “Performance model/products as services/result-based models”; “Reuse/ refurbish/maintain/redistribute/next-life sales”; “Hybrid model/gap exploiter model”; “Remanufacturing next-life sales”; “Upgrading”; “Product transformation”; “Product recycling/Recycling 2.0”; “Energy recovery”. Diaz Lopez et al. Based on 143 case studies, they propose to explain CBMs in terms of: (2019)
Resource efficiency measures (REM) for CBMs, divided in “supply side”, “demand side” and “life cycle”;
Desirable changes in business model elements;
Implementation barriers for CBMs;
Degree of change in terms of BM elements and scope of change in terms of boundaries of analysis (e.g. firm-centric, value chain) for each REM. Yang et al. (2018) They propose a taxonomy and research framework of how PSS business models (i.e. “product-oriented”, “use-oriented”, “result-oriented”) contribute to value creation for circularity (e.g. “inner circle”, “cycling for longer”, “cascaded use, pure circles”). Lüdeke-Freund Employing morphological analysis to explore the configuration of elements of 26 CBM archetypes available et al. (2019) in literature, the authors proposed a morphological charter with the identification of six CBM patterns: (continued on next page) 10 M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 Table 4 (continued ) Type Publication “Name” and description “repair and maintenance”; “reuse and redistribution”; “refurbishment and remanufacturing”; “recycling”; “cascading and repurposing”; and “organic feedstock business model”. Whalen (2019) Based on 56 case studies, the author proposes three sub-types for the CBM archetype Extending Product Value (Bocken et al., 2016): “facilitators”, “redistributors” or “doers”. Differently than the types applied by other frameworks (i.e. commonly describing a combination of elements for designing CBMs), the proposed sub-types refer to possible roles of actors executing the activities for Extending Product Value in the value chain, i.e., they describe whole companies’ business models. adding new elements, adjusting existing elements to accommodate or represented for circular economy. Due to this nature, these circular business model characteristics, or reorganising the posi- frameworks are frequently employed as tools, supporting free tioning or relationship among elements. Recurrently added ele- ideation and modelling of circular business models. Classifications ments were related to strategic measures such as drivers for are related to the dynamic view of circular business model inno- circular economy (Antikainen and Valkokari, 2016; Lewandowski, vation (Wirtz et al., 2016), supporting the identification of how 2016); impacts on environmental, social or economic aspects business models should be configured or changed to accommodate (Bocken et al., 2018; Antikainen and Valkokari, 2016)); and enablers circular economy principles. for circular economy (i.e. take-back systems (Lewandowski, 2016)). Due to this nature, these conceptual frameworks are frequently The majority of the reference models (Nubholz, 2018; Bocken employed in guided ideation sessions to accelerate the design of et al., 2018; Antikainen and Valkokari, 2016; Lewandowski, 2016) circular business models with benchmarking. Moreover, synergies also follow the Business Model Canvas format with an elements- of applying both types of conceptual frameworks are also advo- based diagram and the consideration of an organisation-centric cated in literature. Initial attempts were performed by Aminoff analysis. Exceptions are Nubholz (2018) and Mentink (2014), who et al. (2017), Lewandowski (2016) and Ludeke-Freund (2019). The proposed more comprehensive modifications of the BMC tool. first two articles provide a preliminary idea of how to do it. The last Nubholz (2018) included a matrix structure to analyse the circular article brings a more sophisticated view of a morphologic charter business model elements throughout different life-cycle stages, showing how different circular business model types require while Mentik (2014) expanded the boundaries of the circular different configurations of business model elements. Nevertheless, business model to several organisations, creating a ‘loop of inter- it does not focus on the link of how the six identified business connected business models from different organisations’ to form a model patterns contribute to generating strategic benefits for circular circular business model. While this increases the complexity of the economy (i.e. strategies such as cycling, extending, intensifying, and analysis, making it more abstract and less concise, it can adds detail dematerialising) and the organisation. Additionally, the last frame- and provides additional descriptive capacity for circular business work is based on morphological analysis and represented as a model representations and value flows in practice. morphologic box, which is more adequate for the application in Requirements: Only one article describes requirements (Aminoff computational tools (Ritchey, 2002; Remane et al., 2017), turning et al., 2017). It builds on the value concept (Richardson, 2008) and the representation for conceptual and cognitive purposes complex. shows required changes in value creation and delivery, value cap- ture, and value proposition for shaping circular business models. A 5. Discussion disadvantage of this conceptual framework is the lack of precision, since it does not differentiate circular business model strategies or This section discusses the key findings of the study and how these types to propose the changes. findings serve the research objective of promoting the system- Classifications: As the most recurrent conceptual frameworks, atisation of knowledge to reduce the lack of clarity around the con- they can be divided in three perspectives: typologies, taxonomies, cepts of circular business model and circular business model innovation. morphological charters. The majority of them show archetypes or Enhanced clarity for the circular business model concept: Next to types of circular business models (i.e. how to design different cir- an overview of the concepts history (section 4.1) and the synthesis cular business model alternatives by configuring business model of a unified definition (section 4.2), four circular business model elements differently) (Moreno et al., 2016; Planing, 2018; Diaz strategies were identified e i.e. cycling, extending, intensifying and Lopez et al., 2019; Yang et al., 2018; Bocken et al., 2016; Lüdeke- dematerialising (Fig. 3 in section 4.2). Combining these strategies Freund et al., 2019). One exception (Whalen, 2019) introduces Richardson’s (2008) value logic (i.e. value proposition, value crea- types of circular business models in regards to the role of the tion and delivery, and value capture) inherent in most of the company (i.e. value chain) for ‘extending product value’. Moreover, reviewed definitions, we can discuss how the implementation of some of the classifications highlight how the different archetypes these four circular business model strategies will affect the three or types either contribute to generating benefits for circular econ- business model elements according to recommendations compiled omy in terms of strategies (e.g. slow resource flows) (Geissdoerfer from the reviewed publications (Fig. 5). et al., 2018a; Bocken et al., 2016; Moreno et al., 2016; Yang et al., Cycling entails the implementation of a number of end-of-use 2018), or where they change the business model elements (e.g. strategies, such as reuse, repair and remanufacturing. From a downstream or upstream the value system) (Urbinati et al., 2017; value proposition perspective, take-back is a key element of the Diaz Lopez et al., 2019; Lüdeke-Freund et al., 2019). A detailed value proposition, which is enabled by collaborations in the value overview of the conceptual frameworks is presented in Table 4. chain and effective reverse manufacturing processes (such as In summary, the available conceptual frameworks contribute repair, remanufacture, refurbish and recycling). In this case, value differently to adding clarity for the conceptualisation of a circular capture is mainly related to minimised costs of material acquisition business model or a circular business model innovation. Reference and additional revenues from end-of-use products/materials. As models for circular business models are related to the static view of this strategy increases the longevity of cores or materials, it pre- circular business model innovation (Wirtz et al., 2016), supporting sents the environmental potential to reduce both energy and new the conceptualisation of how a business model should be structured materials intake and waste output.  M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 11 Fig. 5. Key business model considerations for the circular economy, framework developed from Richardson (2009) and our definition of circular business model outlined above.21. 12 M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 Extending aims at keeping the product in use to the highest extent possible, being mainly enabled by design and operation practices. Long-life products (value proposition) that are serviced during its lifetime can create a long-term customer relationship (value creation & delivery), and create new revenue streams during the use phase of the products through service packages or tailored contracts. The implementation of this strategy lead to reduced need for producing new products. Intensifying leads to the implementation of new value proposi- tions around sharing models, being enabled by capacity manage- ment, digital capabilities and customer relationship management. Intensifying enables new business models with stronger servitisa- tion elements, such as PSS, which results in recurrent revenue streams. The main environmental benefits of this strategy are reduced idle time or structural waste (disposal of product before specification lifetime), leading to reduced need for producing new products and reduced waste output. Dematerialising decreases the use of physical resources by enhancing the value created by intangible solutions, such as ser- vices and software. Value creation & delivery is ensured though slow and close the loop capabilities and collaborations. Recurrent revenues, increased profit margins and new pricing mechanisms are key elements for value capture. It is important that these four strategies can also be combined within one business model, especially within a business model ecosystem, as outlined below. Enhanced clarity for the circular business model innovation concept: Next to the synthesis of a unified definition (presented in section 4.2) and the identification of different circular business model innovation strategies e circular start-ups, CBM transformation, CB diversifica- tion and CBM acquisitions (Fig. 4, section 4.2), our analysis of pub- lications indicates that different circular business model innovation strategies might promote different circular economy outcomes (i.e. resource input and waste/emission output). Of these strategies, the ‘transformation’ might have the highest potential impact, especially, if it replaces an existing linear model Fig. 6. Unit of analysis for business model innovation. with a circular one. The ‘start-up’ and ‘diversification’ strategies are very similar in nature. Whether the new business model is build in- beverage companies in Denmark have teamed up with munici- house by an existing corporation or outside of its boundaries by a palities to create a coordination entity to manage the return sys- new entity, both might introduce similar new circular solutions. tems for packaging recycling (State of Green, 2016). And, in the Disruptive innovation theory suggests that start-ups might yield context of circular start-ups, Norsk Ombruk has developed alliances more radical solutions with more e in this case circular economy e with Waste Electrical and Electronic Equipment (WEEE) take back impact (Christensen, 1997). However, nascent research on business systems in Norway and white goods manufacturers, like Electrolux building units indicates that this might hold true within an industry (Nordic Council of Ministers, 2015; Townsend, 2017). rather than across sectors (Geissdoerfer, 2019). In many cases, The reviewed literature also points to a shift in the unit of however, the two strategies might also shift or even reinforce analysis that is already partly covered in the conventional and environmental impact by creating new markets, additional sustainable business model innovation literature. We would expect resource sinks, or previously non-existing demand (Kjaer et al., this shift to be emphasised in the context of the circular economy 2019). With the ‘acquisition’ strategy, the resource efficiency gains with its particular need for stakeholder collaboration and systemic might be either enhanced or reduced depending on the success of ecosystem view (Pieroni et al., 2019a). We have illustrated the shift integration and the associated realisation of synergies among in the unit of analysis in Fig. 6. business models e here we would e.g. expect improved results Most conceptualisations of the business model notion seem to be from industrial organisation and reduced ones from agency theory, implicitly or explicitly based on the value chain concept (see e.g. also depending on relatedness of the businesses involved (Palich Richardson, 2008; Magretta, 2002; Osterwalder and Pigneur, 2010). et al., 2000; Eisenhardt, 1989; Tirole and Jean, 1988). Since the unit of analysis of the value chain is the business unit (Porter, Strategic alliances (Mowery et al., 1996; Gulati, 1998; Hamel, 2004), this is can also be assumed to be the unit of analysis for the 1991) could also be of interest, because of the important role of overarching business model concept. While some authors refer to the ecosystem partnerships, but this is not yet discussed in the litera- company or firm to be at the centre of their business model notion, ture. Alliances can be an enabler for the different strategies, for this line of argument is more convincing for single-product3 com- example in the context of circular business model transformation, panies or firms with a homogeneous portfolio (see e.g. Osterwalder and Pigneur, 2010; Zott et al., 2010; Chesbrough, 2010). 2 We have also successfully used this framework as an ideation workshop tool in educational and industrial settings e think of sticky notes instead of bullet points in 3 the 12 “darker” fields from the lower right - see poster in the appendix. Product in the sense of product or service.  M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 13 The focus of this conceptualisation can be expanded in two di- business models are and how they are innovated can ultimately lead rections: (i) from the intra-organisational perspective to the to the development of research that will support academics and organisational environment and (ii) from the business unit to the industry practitioners with decision-making and adoption of CBMs. corporate view. The limitations of this work derive mostly from the employed Concerning the environment, the focus can be expanded by the methodologies for our literature review. Our search-string based on addition of different stakeholders to the analysis. This is based on database search does not include contributions that are not pub- stakeholder management theory (Donaldson and Preston, 1995; lished in academic journals in the initial sample. This is to a certain Freeman, 1984; Post et al., 2002) and seems to be particularly extent mitigated by the conducted cross-reference snowballing. influencing business model notions aimed at sustainability (see e.g. However, the snowballing can suffer from a lack of randomised Bocken et al., 2013; Geissdoerfer et al., 2017; Pieroni et al., 2019). representativeness, mirroring the selection bias represented in the There are also nascent approaches to expand the business model reviewed literature. concept to the corporate or multi-business unit view, via portfolio Opportunities for future research: The discussed limitations can be management of several business units within one corporation overcome by further research, using different methodological tech- (Henderson, 1973; Cooper et al., 1998), for example by Ho €o€k et al. niques to both test the validity of our results and clarify the contexts (2015) and Aversa et al. (2017). This also bridges the gap from the in which they might not be applicable. We would particularly use of the business model concept in business strategy to the recommend testing the synthesised frameworks for circular busi- corporate strategy context. ness model innovation strategies and key business model consid- If the stakeholder view is further expanded towards a multi- erations - Figs. 3 and 4 - with organisational case studies. A particular business view, this results in the value network (Velu and Stiles, focus should lie on the impact of the four CBM and four CBMI stra- 2013; Zott and Amit, 2010). While still being organisation-centric, tegies on circular economy and sustainability impact and how this view generally puts greater emphasis on value exchanges be- disruptive they are to current linear models. We also encourage to tween stakeholders e not only between the stakeholder and the combine the different frameworks provided in the figures to form focal organisation, but also between other stakeholders. investigative models and hypotheses e think matrices. Examples The value network and business model portfolio perspective can include which of the four CBM strategies works best with which of be combined to an ecosystem view (Iansiti and Levien, 2004; Clarysse the CBMI strategies (Figs. 3 and 4) or which strategy is best covered et al., 2014). Besides combining multi-business model and multi- by which unit of analysis (Figs. 3 and 6). Of course, the framework in stakeholder views into a network perspective, ecosystem analyses Fig. 5 would also lend itself to further investigation. We have also can also expand not only to several business units but entire orga- observed a shift in the unit of analysis in circular economy business nisations (i.e. a multi-corporation view). The concept can thus can go model innovation from the business unit to the ecosystem. The beyond current corporate strategy considerations that it combines conceptual consequences of this shift provide a whole range of new with industry analysis elements, while emphasising collaborative research avenues and the potential of this shift for implementing a and regularly underinvestigating competitive elements of both. circular economy should be empirically investigated. For the nascent From our analyses of the publications that emerged in the concept of business model ecosystems, we would recommend to literature review, the difference between the stakeholder and the work towards a stronger integration of value network and business value network view seem to be ambiguous in the circular business model portfolio considerations to achieve a more holistic tool for model literature. The stakeholder-based literature seems to group corporate and circular economy settings. stakeholders more often and, as an expansion of the value chain, the value network tends to have some more emphasis on analysing Declaration of competing interest the transactions between the nodes (see e.g. Bocken et al., 2013; Geissdoerfer et al., 2017; Velu and Stiles, 2013). The portfolio and The authors declare that they have no known competing the ecosystem views might be particularly interesting for circular financial interests or personal relationships that could have business models, given the circular economy’s considerable appeared to influence the work reported in this paper. emphasis on the interaction of diverse players within the ecosystem (Webster, 2015; Pieroni et al., 2019a). However, in most Acknowledgements of the reviewed literature, the portfolio element was underrepre- sented and the ecosystem concept employed by some authors was This work was supported by the EPSRC Centre for Innovative identical with the value network notion (Christensen and Manufacturing in Industrial Sustainability, grant number EP/I033351/ Rosenbloom, 1995; Moore, 1993; Vasconcelos et al., 2018). 1 and the EPSRC project Business Models for Sustainable Industrial Systems, grant number EP/L019914/1, as well as studentships from 6. Conclusions the EPSRC and the Foundation of German Business. This work was also supported by the research project CIRCit (Circular Economy Integra- We conducted this review to increase the conceptual clarity tion in the Nordic Industry for Enhanced Sustainability and around the notions of circular business model and circular business Competitiveness), which is part of the Nordic Green Growth Research model innovation. and Innovation Programme (grant number 83144) and jointly funded The key contributions of this paper are: (1) an overview of the by NordForsk, Nordic Energy Research, and Nordic Innovation. The history of the concept; (2) an overview and synthesis of definitions authors would like to thank the funding agencies for the support. of the circular business model and circular business model innova- tion concept; and (3) an overview and synthesis of conceptual Appendix A. Supplementary data frameworks. Moreover, by contributing to reducing the conceptual lack of clarity and mapping the research landscape, we provide a Supplementary data to this article can be found online at sturdier basis for the emerging field of the circular business model https://doi.org/10.1016/j.jclepro.2020.123741. innovation. This paves the way for a common understanding and language that can be used to develop the theoretical concept and a Appendix. Workshop poster version of Fig. 5 conceptual anchor for the nascent empirical exploration of the field. The increased clarity and simplicity in communicating what circular 14 M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741  M. Geissdoerfer et al. / Journal of Cleaner Production 277 (2020) 123741 15 References Commoner, B.