Two major forces, industrial revolution and globalisation have largely driven the
business world we see today. The linear economic model of take-make-and-dispose has been the mainstream operating model in the business ecosystems for centuries. It is argued that if organisations pursue similar path to the development, humans would need two planet Earths by 2030 and three by 2050. Part of a viable solution could arguably be the Circular Economy (CE) and within that adapting business models according to the changing economic and ecological landscape. This thesis comprises three essays in this regard. Focusing on the food & drink industry, paper I conceptualises CE business models (BM) and proposes a novel framework for food businesses. The research suggests firms are required to offer CE-oriented food products by focusing on product packaging, ingredients and quality. It is also identified that firms could create value by upcycling bio-waste into novel products to generate new revenue streams, building collaboration, integrating technology, and redesigning supply chains. Managers can use the framework either to reinvent/rethink all the components/elements of their BMs to take a first mover advantage over their competitors or they can disrupt a few elements to begin the transition toward CE practices.
The second paper explores the challenges and barriers firms face and coping
strategies they employ in CE implementation. Through an inductive research
approach and by conducting in-depth qualitative interviews with the senior
managers of 23 companies in the UK, the study identifies 33 firm-specific, market related, and regulatory/institutional challenges and barriers. Challenges around circular value proposition, i.e. product packaging, quality, sourcing of sustainable ingredients, and consumer behaviour are the most significant firm-specific, which are exacerbated by the lack of resources and capabilities. The study reveals that the threat of competition, food supply chain complexities, and creating market demand for circular agri-food products are dominant market-related barriers. Problematic policy making and its implementation, particularly around deposit return scheme (DRS) currently, are hugely impacting food businesses in the UK. The investigation also discovers that case firms employed collaboration, attained business and environmental certifications, and adopted food waste management strategies to create value.
The third paper examines the role dynamic capabilities play in business model
innovation (BMI) for the CE. The study employs an abductive approach. The senior
managers of 23 companies are interviewed on sensing, seizing, and reconfiguring capabilities. The research reveals crowdsourcing, BM experimentation, R&D, and understanding consumer preferences are key sensing capabilities firms demonstrated in adapting to business and environmental ecosystems changes. Collaboration, investing in technological and human development, and attaining business and environmental certifications were important Microfoundations of seizing. It is also identified that organisational restructuring, disrupting the supply chains, and knowledge integration and transfer are crucial reconfiguring Microfoundations. Overall, this thesis highlights the significance of incorporating CE principles into BMs and developing capabilities in creating economic and environmental value.