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Circular Business Model Planning Tool: A tool to help design business models
that extend the useful life of products and materials and capitalize on the
associated value
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Circular Business
Model Planning
Tool
Collect & reintegrate First sale (enabling Additional sale(s) Material recovery
prolonged useful life) of the product or parts
To circulate products, To prevent leakages and
parts, or materials, these When bringing an offer to To further prolong the useful downcycling of materials,
need to be collected and the market, a company life of products, a company a company needs to
reintegrated into the value should enable a long useful can enable additional sale(s) enable closed material
chain. Generally, life of resources. to other users. This can be loops (e.g. recycling)
reintegrating secondary Manufacturing companies enabled through arranging when the end-of-life is
production (i.e. products, can for instance design refurbishment, repair or irreversibly reached.
parts, materials) should be for long-life, repair or re- remanufacturing. In some Product and business
preferred over using manufacturing of their cases, only parts of the models should be
primary materials. Collection products. Companies in product are suitable for designed to facilitate
and reintegration can, in the aftermarket can resell reintroduction to the market. maximum recovery of
some cases, also be a product or its parts, e.g. Note that the application of materials.
organized after the first through operating the product and hence the
sale of a product to enable refurbishment, repair value proposition and
additional sale(s) or or remanufacturing. customer segments may
material recovery. change for the additional
sale(s).
2.2.The
2. The Thethree
threethreevalue
valuevaluedimensions
dimensions
dimensions ofofbusiness
of the the
thebusiness
businessmodel
modelmodel
and and
and
theirtheir
theirelements
elements
elements (based
(based
(based on
onBusiness
on the the
theBusiness
Business Model
ModelModel Canvas*)
Canvas*)
Canvas*)
………………………………………………………………………………..…
………………………………………………………………………………..…
………………………………………………………………………………..…
Value
Value
dimensions
dimensions Business
Businessmodel
modelelements
elements Examples
Examplesofof innovating
innovating the
thebusiness
business
model
model
Value dimensions Business model elements Examples of innovating the business model
elements
elementstotofacilitate
facilitate
circularity
circularity
elements to facilitate circularity
VALUE
VALUE
VALUE PROPOSITION
PROPOSITION • •Innovating
Innovating thethe
offer
offer
from
from selling
selling ownership
ownership of of
a a
PROPOSITION Offer;
Offer; • Innovating the offer from selling ownership of a
Offer; Value product
product to to
selling
selling
access
access to to
it (e.g.
it (e.g.
totofacilitate
facilitate
itsits
Valueproposition;
proposition; productcollection
to sellingataccess
collection at
thethe to it (e.g. to facilitate its
end-of-life)
end-of-life)
What
What value
value
is is
proposed
proposed
Value proposition; collection at the end-of-life)
What value isto
proposed Customer
Customer segments;
segments; • •Improving
Improving thethe
value
value
proposition
proposition through
through adding
adding
and
and
to whom?
whom? Customer segments; Improving the value proposition through adding
and to whom? Customer/partner
Customer/partner relationships
relationships
•
services
services (e.g.
(e.g.repair
repair
andandupgrades)
upgrades)
Customer/partner relationships services (e.g. repair and upgrades)
• •Adjusting
Adjusting customer
customer relationships
relationships (e.g.
(e.g.rewards)
rewards) toto
• Adjusting customer relationships (e.g. rewards) to
help
help
remove
remove barriers
barriers
totocollection
collection of of
products
products
VALUE
VALUE CREATION
CREATION help remove barriers to collection of products
VALUE CREATION
AND DELIVERY
AND DELIVERY
AND DELIVERY
KeyKeyactivities;
activities; • •Finding
Finding
key
key
partners
partners
that
that
provide
provide
access
access
toto
How
Howis is
value
value createdKey activities;
created KeyKeyresources/
resources/ • Finding key partners that provide access to
capabilities;
capabilities; secondary
secondaryproducts
productsandand
materials
materials
How is and
value
and created
delivered?
delivered? Key resources/
KeyKey capabilities;
partners;
partners; secondary products
• •Setting-up
Setting-up and materials
reverse
reverse
logistics
logistics
and delivered? Key partners;
Channels
Channels • Setting-up reverse logistics
Channels
VALUE
VALUE
CAPTURE
CAPTURE • •Capitalizing
Capitalizing
onon
the
the
aftermarket
aftermarket of of
products
products
VALUE CAPTURE • Capitalizing on the
• •Reducing
Reducing aftermarket
production
production of through
costs
costsproducts
throughsubstituting
substituting
Costs;
Costs; • Reducing production costs through substituting
How
Howis is
value Costs; Revenue
captured?
value captured? primary
primary
materials
materials
with
with
lower-priced
lower-pricedsecondary
secondary
Revenueflows
flows primarymaterials
materials
How is value captured? Revenue flows materialswith lower-priced secondary
materials
* www.strategyzer.com
* www.strategyzer.c
* www.strategyzer.com
How to use the circular business model planning tool?
………………………………………………………………………………..…
Business model interventions in the product life Begin with mapping the business model for the first
cycle to enable circularity. sale (2nd column). Fill in the other interventions
(columns) as much as possible. In each column, start at
the top of the bar and work your way downwards
through the business model elements.
Offer
Offer
Offer
………………………… ………………………………
…………………………
………………………… ………………………………
……………………………… ……………………
…………………… ……………….
…………………… ………………. …………….
………………. …………….
…………….
Value
Valueproposition
Value proposition
proposition
………………………… ………………………………
…………………………
………………………… ………………………………
……………………………… ……………………
…………………… ……………….
…………………… ………………. …………….
………………. …………….
…………….
Customer
Customersegments
Customer segments
segments
………………………… ………………………………
………………………… ………………………………
……………………………… …………………… ……………….
……………………
…………………… ………………. …………….
………………. …………….
Relationships
Relationships
………………………… …………….
Relationships
customers/partners
customers/partners
customers/partners …………………………
………………………… ………………………………
………………………… ………………………………
……………………………… …………………… ……………….
……………………
…………………… ………………. …………….
………………. …………….
…………….
VALUE CREATION
VALUE
VALUECREATION
CREATION
ANDAND DELIVERY
ANDDELIVERY
DELIVERY
J. Nussholz (2017)
VALUECAPTURE
VALUE
(2017)
CAPTURE
Nussholz(2017)
Costs
Costs ………………………………
………………………… ……………………………… …………………… ……………….
………………. …………….
…………….
Costs ………………………… ……………………
…………………… ……………….
J.J.Nussholz
………………………… ……………………………… …………….
Revenue flows
Revenue
Revenueflows
flows
Case Example
The company Fairphone offers a modular, long-life phone It is important to note that not all interventions have to
designed for reparability and recycling. Business model be addressed in a circular business model. This is
elements are shaped to facilitate collection after use, because in some cases, they are not economically
additional lives of phones, and material recycling. Through desirable or more resource efficient. But blank columns
collaborating with the reuse and recycling company can indicate that there may be an opportunity for
Teqcycle, for instance, Fairphone operates a take-back embedding more circularity in the business model and
scheme for phones and facilitates resale and recycling. that is worth exploring. To seize these opportunities, it
often requires collaboration along the value chain and
Fairphone, at the moment, does not use secondary alignment of the business model with partner
materials in their own products (e.g. recycled copper or companies.
plastic). Therefore, the first column is left blank. In the last
two columns, responsibilities between Fairphone and
Teqcycle are split and, thus, not all business model
elements of the focal company Fairphone are filled in.
www.Fairphone.com
Circular
Circular
Circular Business
Business
Business
Model:Model:
Model:
Fairphone
Fairphone
Fairphone
Circular Business Model:
Collect & reintegrate Collect & reintegrate Additional Enable material
Fairphone Collect
Collect
& reintegrate
& reintegrate First
FirstFirst
salesalesale
(with (with
(with Collect
Collect
& reintegrate
& reintegrate Additional
Additional ofsale
salesale of Enable
of Enable material
material
(substitute primary prolonged use) (organize
(organize take-back)
take-back)
(organize take-back) product or parts recoveryrecovery
VALUE (substitute
(substitute
primary
primary prolonged
prolonged use)use) product or parts
product or parts recovery
VALUE
VALUE materials) Collect & reintegrate
PROPOSITION Collect & reintegrate
materials)
materials) First sale (with Additional sale of Enable material
PROPOSITION
PROPOSITION (substitute primary (organize take-back) product or parts recovery
VALUE prolonged use)
materials)Modular long-life phone; Free shipping for Resale for
Offer Offer
Offer
PROPOSITION Modular
Modular long-life
long-life phone;
phone; Free Free
shipping
shipping
for for
two EOU phones Resale
Resale for for Material recovery
Teqcycle Material
Material
recovery
recovery
……………………
……………………
replacement parts
………………………………
…………………… ………………………………
replacement
replacement
………………………………
parts parts ………………….…..…
two two
EOU EOU
phones
phones ………………….
Teqcycle
Teqcycle
………………….
…………………. ……….……….
……….……….
……….……….
(e.g. gold)
Modular long-life phone; ………………….…..…
………………….…..…
Free shipping for Resale for
(e.g.(e.g.
gold)gold)
Value Value
ValueOfferproposition
proposition
proposition HighHigh
High performance phone;
performance
performance phone;
phone; Easy,
two
Easy,
Easy,
EOU
free-of-
free-of-
free-of-
phones EasyEasy
Easy repair of Material Easy
repair
repair of of EasyEasy
recycling
recovery
recycling
recycling
……………………
……………………
replacement
………………………………
………………………………
parts
low LCC; reparability ………………….…..…
…………………......…
charge shipping
Teqcycle
…………………. phones ……….……….
…………………. ……….……….
(e.g. gold)
of phones
……………………
…………………… ………………………………
………………………………
low low
LCC; LCC; reparability
reparability …………………......…
…………………......…
charge
charge shipping
shipping ………………….
…………………. phones
phones ……….……….
……….……….
of of
phonesphones
Value proposition
Customer segments High performance
Private phone;
individuals; firms; Easy, free-of- Easy repair of Easy recycling
Customer
Customer
segments
segments All Fairphone
……………………
……………………
Private
Private
low individuals;
individuals;
………………………………
LCC;
………………………………
firms;
firms;
reparability …………………......…
All All
Fairphone
charge Fairphone
shipping ………………….
phones
…………………. ……….……….
of phones
……….……….
Customer segments ……………………
……………………
public
………………………………
………………………………
public
public
organizations
organizations
organizations ……………………...…
……………………...…
……………………...…
customers
customers
customers ………………….
…………………. ……….……….
……….……….
Relationships
Relationships
Relationships
Private individuals; firms;
Community-based,
All Fairphone Collaborative
Community-based, Collaborative Collaborative
customers/partners …………………… ………………………………
public organizations
Community-based,
Community-based, ……………………...…
Community-based,
Community-based,
customers ………………….with Teqcycle……….……….
Collaborative Collaborative
Collaborative
customers/partners
customers/partners
Relationships ……………………
…………………… ………………………………
transactional with customers
…………………… transactional ……………………..…
transactional ………………….
………………….
………………….
withwith Teqcycle
Teqcycle …….………….
…….………….
…….………….
with with
with Teqcycle
Teqcycle
Teqcycle
………………………………
transactional
withwith
……………………..…
……………………………… ……………………..…
customers
customers
Community-based,
transactional
transactional
Community-based, Collaborative Collaborative
customers/partners
…………………… ………………………………
transactional with customers
……………………..…
transactional ………………….
with Teqcycle …….………….
with Teqcycle
VALUEVALUE
VALUE CREATION
CREATION
CREATION
AND DELIVERY
DELIVERY
ANDAND DELIVERY
Production; ‘Sustainable’
Production;
Production; ‘Sustainable’
‘Sustainable’
VALUE CREATION value chain management,
AND DELIVERY value
value chainchain management,
management,
Production; ‘Sustainable’ Motivating return of Support EOL Support EOL
Sales; Shipping Motivating
Motivating return
return of of Support
Support EOLEOL Support
Support
EOLEOL
Key activities Sales;
Sales; Shipping
Shipping management management
KeyKey
activities
activities ……………………
…………………… ………………………………
value
………………………………
…………………… ………………………………
chain management, high-value phones
…………………........
high-value
high-value phones
phones ………………….
management
management
………………….
………………….
Support EOL ……….……….
management
management
……….……….
……….……….
Motivating return of Support EOL
Key activities
Fair-sourced
Sales; Shipping materials;
Fair-sourced
Fair-sourced materials;
materials; …………………........
…………………........ management management
Key resources/ ………………………………
…………………… Modular Modular phone design;
high-value phones
Collection scheme ………………….
…………………........
Design
Design
Design for for
for
……….………. Design for
Design
Design for for
KeyKey
resources/
resources/ Fair-sourced
Modular
phonephone materials;
design;
design;
………………….
978-91-87357-32-9
disassembly
capabilities
Key resources/ ……………………Software
……………………
…………………… ………………………………
Software ………………….....…
Collection
Collection
………………….....…
………………….....…
scheme
scheme
………………….
………………….
Design for
disassembly
disassembly ………….…….
………….…….
………….…….
Design recycling
for
recycling
recycling
capabilities
capabilities ………………………………
………………………………
Modular phone design;
number978-91-87357-32-9
Software Collection scheme
capabilities …………………… ………………………………
Software
Part manufacturer; Software ………………….....… Teqcycle for ………………….
disassembly
Teqcycle for ………….…….
recycling
Teqcycle for
KeyKey Key
partnerspartners
partners Part Part manufacturer;
manufacturer; Software
Software Teqcycle
Teqcycle for for Teqcycle
Teqcycle for for Teqcycle
Teqcycle for for
…………………… ………………………………
developers;
…………………… ………………………………
……………………
NGO’s ………………….…....
shipping
Teqcycle for ………………….
Teqcycle
………………….
………………….
resale
for ………….…….
Teqcycle
………….…….
………….…….
recycling
for
Key partners ………………………………
Part manufacturer;
developers;
developers; NGO’s
NGO’s Software
………………….…....
………………….…....shipping
shipping resale
resale recycling
recycling
…………………… ………………………………
developers; NGO’s
Sales via website and ………………….…....
shipping
Free shipping for …………………. ………….…….
resale recycling
Channels
Channels
Channels
Sales
Sales via website
via website and and FreeFree shipping
shipping for for
…………………… ………………………………
retailer
…………………… ………………………………
……………………
Sales
………………………………
via website and ………………..…......
Free users via website
shipping for ………………….
………………….
…………………. …….………….
…….………….
…….………….
Channels retailer
retailer
…………………… ……………………………… ………………..…......
………………..…......
users
users via via website
website
…………………. …….………….
VALUE CAPTURE
retailer ………………..…......
users via website
VALUE
VALUE CAPTURE
CAPTURE
Nußholz
J.L.K. Nußholz
VALUE CAPTURE
J.L.K.Nußholz
ISBNnumber
Production and operations Shipping
Costs Costs
Costs ……………………
Production
Production and and
………………………………
operations
operations
…………………......…
Shipping
Shipping
…………………. …….………….
Costs ……………………
……………………
……………………
Production and operations
………………………………
………………………………
……………………………… …………………......…
…………………......…
Shipping
…………………......… ………………….
………………….
…………………. …….………….
…….………….
…….………….
J.L.K.
Revenue flows Sales of phones and
ISBN
Revenue
Revenue
flows
flows Sales
Sales of ofofphones
phones
Sales and and
phones and
Revenue flows replacement
replacement
replacement
parts
parts
parts
replacement parts www.Fairphone.com
www.Fairphone.com
www.Fairphone.com
www.Fairphone.com
Who
Who can
can use
use the
the circular
circular business
business model
model planning
planning tool?
tool?
………………………………………………………………………………..…
………………………………………………………………………………..…
Business
Business developers
developers Managers to
Managers to develop
develop aa Researchers
Researchers to to Students to
Students to develop
develop
and entrepreneurs
and entrepreneurs common
common understanding
understanding study
study business
business understanding
understanding of of the
the
to
to develop
develop andand and
and language
language among
among models
models designed
designed interventions
interventions that
that
integrate
integrate innovative
innovative teams,
teams, internal
internal and
and for
for circularity
circularity and
and create
create circularity
circularity in
in
ideas
ideas that
that can
can external
external stakeholders
stakeholders analyze
analyze the
the business
business models
models and
and
increase
increase circularity
circularity of
of for
for effective
effective business
business model
model develop
develop own
own ideas.
ideas.
an
an offer
offer across
across the
the implementation
implementation of of elements
elements forfor each
each
life
life cycle.
cycle. business
business model
model cycle.
cycle.
innovations
innovations and
and
collaboration
collaboration processes.
processes.
Additional
Additional Readings
Readings
………………………………………………………………………………..…
Nußholz, J. L. K. (2017). Circular Business Models: Defining a Concept and Framing an Emerging Research
Field, Sustainability, 9(10).
Nußholz, J. L. K. (2018). A Circular Business Model Mapping Tool for Value Creation from Prolonged
Product Lifetime and Closed Material Loops.. Special Issue Product Lifetimes and the Environment. Journal
of Cleaner Production.
Mont, O., Plepys, A., Whalen, K., & Nußholz, J. L. K. (2017). Business model innovation for a Circular
Economy: Drivers and barriers for the Swedish industry – the voice of REES companies. IIIEE at Lund
University, Lund
Osterwalder, A. & Pigneur. Y., (2010). Business Model Generation: A handbook for visionaries, game
changers, and challengers. Hoboken, New Jersey: John Wiley and Sons.
Acknowledgement
………………………………………………………………………………..…
This research was supported by the Mistra REES
(Resource Efficient and Effective Solutions) program,
funded by Mistra (The Swedish Foundation for
Strategic Environmental Research)
Contact
………………………………………………………………………………..…
International Institute for Industrial Environmental
Economics (IIIEE), Lund University