Drivers and challenges of circular business models : Comparative case study in textile industry

Abstract

The aim of this research is to advance knowledge of circular business models and the drivers and challenges related to the implementation of these models. Textile industry is the world`s second most polluting industry and the current linear “take-make-waste” model of this industry cannot continue. Circular economy and circular business models are solutions for the current unsustainable linear economic model. Circular economy bases on the idea of restorative and regenerative production and consumption systems. The aim of these systems is to keep materials and products as their highest utility for as long as possible. Despite the growing popularity of circular economy, it is still a poorly understood concept and the implementation of circular business model is even more uncertain. Thus, this thesis explores circular business models in textile industry as well as the factors which strengthen or hamper the implementation of a circular business model. This study is conducted as a comparative case study that reflects the circular business models of developing and established textile companies. The empirical research was conducted through four semi-structured interviews with Finnish textile companies. Furthermore, this research follows a deductive approach as the research continues from theory to empirical testing. The findings of this research explain different circular business models and the drivers and challenges related to the specific circular business model. The research results show what business actions each company operated to create a circular business model. Furthermore, this research analyzes the differences and similarities between developing and established textile companies. Circular business models of case companies varied with each other, but the main drivers and challenges were similar. The main drivers related to circular economy were social and cultural issues whereas the main challenges related to circular economy were the lack of technological development. The outcomes of this study will support textile companies to analyze different options of implementing circular economy and the things which will either strengthen or hamper the implementation.