Sustainable Business Model Adaptation in International Markets: A Case Study on Circular Economy and Green Supply Chain Integration by Multinational Enterprises

Sustainability has transitioned from a peripheral concern to a central strategic imperative for Multinational Enterprises (MNEs) in the contemporary global landscape. Within this context, Business Model Innovation (BMI) is recognized as a critical mechanism for embedding sustainability into the core of an organization. Specifically, the integration of Circular Economy (CE) principles, which aim to eliminate waste and circulate resources, and Green Supply Chain Management (GSCM) practices, which embed environmental considerations across the product lifecycle, represents a potent synergistic approach. However, the academic discourse remains fragmented, with limited empirical understanding of how MNEs navigate the integration of these concepts across diverse and often challenging international institutional environments. The primary goal of this study is to examine how MNEs adapt their business models to incorporate CE and GSCM principles across various international markets. The research is guided by two main questions: first, how are these adaptations reflected in their business models, and second, what internal capabilities and external institutional factors influence this process? To frame this inquiry theoretically, the study is based on Institutional Theory, which explains how external coercive, normative, and mimetic pressures influence organizational behavior, and the Resource-Based View (RBV), which emphasizes the internal resources and capabilities that provide a competitive advantage. The key findings reveal that the adaptation of Sustainable Business Models (SBMs) is a multifaceted and context-sensitive process. It was found that MNEs do not implement a uniform global strategy but engage in a deliberate balancing act between global strategic alignment and local operational customization. The integration of CE and GSCM imposes a vital reconfiguration of key business model components, including value propositions, key activities, and key partnerships. Externally, the reworking is strongly influenced by a combination of regulatory pressures, market demands, and infrastructural readiness in host countries. Internally, the efficiency of integration is resolved by organizational capabilities such as cross-functional collaboration, technological expertise, senior leadership commitment, and the ability to foster strategic partnerships with suppliers. The interaction between these external pressures and internal capabilities was identified as the central dynamic explaining the alteration in adaptation strategies and outcomes.