Circular Economy Business Modeling
Explore the potentials of a circular transformation and close the loop with us
We support your business in transitioning from linear to circular value chains, with the intention of decoupling economic growth from finite resource usage. A circular business model is designed to mitigate escalating costs and diverse risks that are associated with traditional linear approaches. Moreover, it enables capturing unexplored value and promising opportunities – for your business, the environment and society. Leveraging our broad experience in innovation management and business model development across diverse industries, we help our clients to navigate through this circular transformation journey.
What's at Stake?
Looming Consequences of Staying Put
Recent developments indicate clearly: Companies that want to stay relevant in the future, must transform into a sustainable business. Across industries, market participants find themselves under considerable pressure from regulation and stakeholders, to align their operations to the demands of a sustainable future and society. Geopolitical shifts impose considerable risks on supply chains and establish new rules for companies.
The costs and risks associated with failing to adapt to new economic and regulatory conditions shaped by the macro-trend of sustainability are diverse and continuously rising. These can be summarized in:
- Erosion of market share and customer flight due to shifting customer preferences and disruptive advances of forward-thinking market rivals
- Impaired brand image due to negative consumer perception
- Constrained access to investor capital and disinvestments due to evolving investor priorities towards more sustainability
- Exposure to regulatory penalties from non-satisfying external reporting and non-compliance to emerging sustainability laws
- Increasing resource prices, high volatility and supply chain vulnerabilities stemming from dependence on finite resources
- Growing costs for carbon emissions and other detrimental externalities
- Decreased attractiveness for top talents and reduced employee retention
Circular Business Models as Winning Element for a Sustainable Future
There are many challenges to be faced when transforming into a sustainable business. Companies that have a progressive mindset and embrace the sustainability journey for their business discover new ways for value creation and avoid existential risk. Circular Economy offers such a powerful way forward.
With the European Green-Deal, the EU delivers a comprehensive answer on how to encounter the massive challenges of climate change and sets new standards for the future. And one major lever is: Advancing a Circular Economy.
Circular Business Models present a future-fit approach that will outperform strategies that not actively embrace sustainability. Oriented to and designed for the future conditions, Circular Business Models create value by:
1. Avoiding value destruction by mitigating current and future business risks associated with the supply of finite raw material, regulatory and political reforms as well as changing expectations and requirements from a diverse set of stakeholders.
2. Creating value by exploring new business opportunities in emerging green profit pools and taking advantage of novel innovations and favorable synergy effects emerging from the green transition.
To fully capture the circular advantages, organizations must embrace a substantial pivot within their established value creation systems. The transformation towards a circular business model requires a systemic change approach, the appropriate circular competencies, understanding and full commitment of decision makers. Incremental improvements towards more sustainability within the linear framework are an excellent to start with but have limited potential in the long run.
Eventually, a circular business model complies future requirements to operate and claims novel paths to create value in form of new products and services, new value chain processes in form of value circles and broader collaborative ecosystems with partners.
Circular Economy as Catalyst for Sustainable Business Success
Realizing the Circular Advantage
The core idea of the Circular Economy reflects the fundamental mechanisms that preserves our natural environment and regulates its balance. As a blueprint for our economic system, circular businesses are operating while considering our planetary boundaries. The underlying business model is defined by the following circular principles:
- Closed-Loop Systems: Differentiating from a linear “take, make, dispose” approach, a circular model excels by capturing end-of-use products and resources and recirculating them back into the system. In that way, it is creating a self-sustaining circle that avoids the accumulation of waste and the exploitation of finite resources.
- Resource efficiency and value preservation: Within the closed loops, products are designed to retain their value and usability for as long as possible. Different R-Strategies facilitate value preservation via repairing, reusing, refurbishing end-of-use products instead choosing recycling immediately. In the manufacturing process, respective operations are aligned to use resources efficiently. This entails optimizing energy consumption, cutting GHG emissions, improving resource employment via saving initiatives to avoid waste pools and value leakage.
- Use of renewable resources: Besides the efficient and mindful usage of precious resources, the shift to renewable energy sources and input material builds a core pillar of circular approach as they are inherently circular and avoid adverse externalities that create long term harm for the natural environment.
- Resource Recovery: Recovering activities extend the traditional waste management concept and turn value chains into value circles. Its purpose is to capture the embedded value of end-of-use goods by collecting, processing, and recirculating the recovered resources. Ideally, there is least value erosion possible (minimal “downcycling”), and the material quality remains the same or even increases. (maximal “upcycling”).
The Bosch Circular Economy Consulting Approach
Our Circular Economy Consultants support your business by crafting a circular strategy and developing and implementing a circular business model via four different phases:
Our special offer to you
Our Pro Bono Project
We, as BMC Circular Economy experts, would like to invite you! In an initial condensed assessment, we will screen and evaluate your business`s individual potential for circularity. We will assist you in opening new perspectives on your value creation processes and explore your capacity for sustainable innovation. Seize the opportunity and apply for our free pro bono consultation.