Circular Business Models (DP IB Business Management)
Revision Note
Circular Business Models
A circular business model is an approach to business designed to minimise the consumption of scarce resources and reduce waste whilst maximising the use and value of resources
Materials and products are recycled, reused, or regenerated rather than being disposed of after use
A circular business model is also known as the cradle-to-cradle approach
In a circular business model, products are designed with durability, reparability, and recyclability in mind
The focus is on creating products that can be easily disassembled and their components reused or recycled
This promotes the use of renewable resources, reduces dependence on finite resources and minimises a businesses environmental impact
Adopting a circular business model requires a shift in mindset including
Involving multiple stakeholders including businesses, governments, consumers and investors
Rethinking business processes, product design, supply chains, and waste management practice
Key Principles of a Circular Business Model
Principle | Explanation |
---|---|
Design for longevity |
|
Resource efficiency |
|
Recycling & reuse |
|
Product as a service |
|
Biomimicry |
|
Collaboration & partnerships |
|
Advantages of a circular business model include
reduced waste generation
decreased reliance on finite natural resources
cost savings through resource efficiency
enhanced brand reputation
increased resilience to resource scarcity and price volatility
Patagonia: an example of a circular business
One example of a business with a circular business model is outdoor clothing company Patagonia which has implemented several initiatives to promote sustainability and reduce waste
Its circular business model focuses on extending the life of products, promoting repair and reuse, using recycled materials and encouraging responsible consumption
The "Worn Wear" program encourages customers to repair and reuse their clothing instead of buying new items
The business offers free repairs for their products and also sells used clothing through their online platform, extending the lifespan of their products and reducing the overall demand for new clothing
Patagonia has made efforts to use recycled and environmentally friendly materials in their products
E.g. they have introduced a line of clothing made from recycled plastic bottles and recycled polyester and use organic cotton to minimise the environmental impact of their manufacturing processes
Patagonia encourages responsible consumption by actively discouraging customers from purchasing products they don't need
E.g. advertising campaigns with slogans like "Don't buy this jacket" raise awareness about the environmental consequences of excessive consumption
Last updated:
You've read 0 of your 10 free revision notes
Unlock more, it's free!
Did this page help you?