GOING CIRCULAR?

Topics of the module

Exploring the new building blocks in a CBMC

If you compare The Business Model Canvas (BMC) to The Circular Model Canvas (CBMC) you will notice that there are other additional pillars in the latter one (Lewandowski, 2016):

Social Value, Planet Value, Take-Back System and Adoption Factors.

In the following picture, according to Osterwald and Pigneur, 2010 we can see the division of the Value proposition section into the mentioned subsections - planet value and social value

 
While we introduced these new circular building blocks in Module 1, all of the CBMC building blocks will in fact be affected by going from a linear business model to a circular one.

Value propositions — offered by circular products enabling product-life extension, product-service system, virtualized services, and/or collaborative consumption. Moreover, this component comprises the incentives and benefits offered to the customers for bringing back used products.

As showed in Module 1 the Value Proposition is subdivided into two more blocks, allowing for measuring:
  • Social Value the impact, in terms of people and community, of your business on your social environment.
  • Planet value focuses on ensuring a sustainable future for our planet while reducing waste and reusing/circulating materials for as long as possible.
  • Customer segments — directly linked with the value proposition component. Value proposition design depicts the fit between value proposition and customer segments. This is where we look for the types of customers that are willing to pay extra for a product with a high social og planet value i.e. Circularity.
  • Channels — possibly virtualized through selling virtualized value proposition and delivering it also virtually, selling non-virtualized value propositions via virtual channels, and communicating with customers virtually. Virtualization is an important way to reduce carbon footprint, and still reach a large segment of customers.
  • Customer relationships — Producing on order or to the customers wishes, and social-marketing strategies and relationships with community partners when recycling 2.0 is implemented. This way the products reflect the demand form the actual customers, and waste or surplus products are minimized.
  • Revenue streams — Based on the extended value propositions (Social and Planet value) payments for a circular product or service can be set at a higher level. And payments for delivered availability and usage can also be an option. A Circular product might be taken back after usage, or it can be rented out for a period.  Revenues may also pertain to the value of resources retrieved from material loops since waste is now also considered a resource.
    It’s important that the revenue streams cover the additional costs of being a circular business. Some customer segments are more than willing to pay extra for saving the planet.
  • Key resources — choosing suppliers offering circular materials, virtualization, resources allowing to regenerate and restore natural capital and resources obtained from customers or third parties meant to circulate in material loops.
  • Key activities — focus on increasing performance through efficient production, better process control, equipment modification and technology changes, sharing and virtualization, and on improving the design of the product, to make it ready for material loops and becoming more eco-friendly. Key activities might also comprise lobbying.
  • Key partnerships — based on choosing and cooperating with partners, along the value chain and supply chain, which support the circular economy.
  • Cost structure — reflecting financial changes made in other components of CBM, including the value of incentives for customers. Special evaluation criteria and accounting principles must be applied to this component.
    In a Circular business there are costs related sourcing the right kinds of materials, and production facilities. 
  • Take-Back system — the design of the take-back management system including channels and customer relations related to this system.
    So a real Take-Back system allows customers to return a used product, maybe even on the basis of a reward system. This product can then be recycled into the production, or be safely disposed of.
  • Adoption factors — transition towards circular business model must be supported by various organizational capabilities and external factors - See a more detailed description of the adoption factors in Module 1.

    As shown in this figure all of the Building Blocks of the CBMC are in play, when you are designing a Circular business.
 
 
In our “Farm near Rotterdam” example, you can see some real-life examples of Circular considerations set in the CBMC.

 

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This project (project no: 2019-1-SE01-KA204-060527) has been funded with support from the European Commission.
The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.
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