Circular economy has gained significant attention in the past decade as a potential solution to address sustainability challenges. Implementing circular business model in the core business operation of a company is referred as circular business model innovation (CBMI). It contains a set of dynamic change processes including visioning, sensing, seizing, and transforming. Among all these phases, transforming phase has been in lack of research. This study examines transforming phase of CBMI in the multinational company IKEA. It adopts the business ecosystem perspective to investigate the specific actions and actors involved in the transform- ing phase of CBMI. The paper employs qualitative research with an in-depth case study method with semi-structured interviews. The aim of this research paper is to contribute to theoretical advancements by enhancing our understanding of the transformative phase of CBMI. The findings offer insights and implications about the opportunities and challenges faced by multinational companies during the CBMI process.

The fashion industry is ranked as the fourth most environmentally harmful industries in the world. A main cause being the overruling destructive model of take-make-dispose that maintains our reliance on virgin materials. Academia and European Union policymakers believe the Circular Economy is a more sustainable alternative to this linear model. The transition to a Circular Economy requires collaboration between organisations across the value chain to close the loop. These organisations come together to share their capabilities forming circular ecosystems. However, key authors in the field warn that collaboration is difficult and should only be entered with an intention to actively manage it. In this study we therefore set out to understand collaboration in these ecosystems of organisations in the fashion and textiles industry. To fulfil the aim of our research, we conducted a qualitative study following an interpretative approach, focusing in on a pioneering case study from the industry. The New Cotton Project is a 3-year EU-funded project forming a circular model for commercial garment production. Using the Theory of Collaborative Advantage as a theoretical lens, we came to understand that collaboration in these ecosystems in the fashion and textiles industry is complex and challenging, yet it is optimistic and hopeful as partners try to overcome issues stemming from the pre-existing linear model. We also argue that collaboration that leads to collaborative advantage in these ecosystems is not a result of serendipity but of innovators, organisations and policymakers coming together to transition the industry.