Exploring the challenges for circular business implementation in manufacturing companies: An empirical investigation of a pay-per-use service provider

Abstract

The shift to a circular economy (CE) is associated with the need to implement innovative business models, but the adoption of circular business strategies in the industry has been limited. In fact, manufacturing companies face a range of challenges when transitioning toward such strategies, yet these challenges are rarely discussed in practice. This paper investigates the challenges faced by a manufacturing firm when implementing a circular business model and the solutions adopted to overcome them. A case-based research design was adopted in this study. The main challenges for circular business implementation faced by companies were identified in the literature and applied as lenses for examining the transition to a new circular business strategy in the company under analysis. Data analysis involved working with the data from the ground up to identify solutions for overcoming the challenges. The main findings reveal that changes needed for implementing a circular business model are achieved by integrating and engaging multiple organizational functions, each of which is complementary and mutually supportive. The involvement and collaboration of multiple stakeholders play an important role in circular business model implementation and operation. Moreover, the implementation of such models should consider specific contextual aspects of the business in question, i.e., alignment between external conditions and the business model should occur. A deeper understanding of the development of other types of circular business models in distinct contexts, and the capabilities necessary to develop and implement them, is recommended for further research.