Configuring New Business Models for Circular Economy through Product–Service Systems

• Main Authors: Marina P. P. Pieroni, Tim C. McAloone, Daniela C. A. Pigosso
• Format: Article
• Language: English
• Published: MDPI AG 2019-07-01
• Series: Sustainability
• Subjects: business model innovation; circular economy; product-service system (PSS); configuration; action research
• Online Access: https://www.mdpi.com/2071-1050/11/13/3727

Product&#8212;service systems (PSSs) are often outlined as potential enablers of new business models for circular economy. However, not all business models based on product-service systems have superior circularity potential. This research demonstrates how the application of a previously developed business model configurator for circular economy can support the design and assessment of customer value, economic and resource decoupling potential for product-service system business models in practice. By applying action research in two Nordic manufacturing companies from the furniture sector, different business model concepts based on product-service systems were proposed and assessed. Results indicate positive uptake by companies regarding the usefulness of the obtained outcomes. This research identified two key findings about &#8216;product-service system business models for circular economy&#8217;: (i) their configuration should fulfil certain simultaneous conditions&#8212;i.e. superior customer value, economic growth, and resource decoupling potential<i>&#8212;</i>to contribute to circular economy; and (ii) they are often <i>&#8216;niche solutions&#8217;</i>, fulfilling specific needs and customer segments, and more likely to flourish with certain types/characteristic of products, segments or geographical locations. Lastly, a framework outlining the conditions and trade-offs for assessing the circularity potential of business models based on product-service systems is introduced as one of the key contributions.