Research

From theory to practice: systematising and testing business model archetypes for circular economy

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Abstract

A number of archetypes exist to describe potential business models for circular economy, but the majority of them lack validation in practice. Although diversity is natural for an emerging field such as circular economy, building consensus of terminology and archetypes is important to achieve a shared discourse, which is fundamental for the implementation of business models. By reviewing academic and practical literature, this article systematises twenty archetypes of business models for circular economy, according to a framework focused on downstream and upstream architecture, and the type of value delivered, created or captured. Additionally, it proposes a way to evaluate the application of the archetypes in practice, through a deck of cards to support companies in identifying opportunities, generating ideas, and prioritising business models for circular economy. The application of the archetype cards in six manufacturing companies resulted in four key findings: (i) existing archetypes hold a reductionist approach with limited attention to the downstream value logic; (ii) the archetypes’ application in practice requires sectorial contextualisation, harmonisation of the abstraction level and standardisation of archetypes’ structure; (iii) there was a lack of detailed guidelines for archetype selection and combination; and (iv) the action research approach enables the exploration of radical innovation for circular economy business models.