The Circular Economy is on the top of the corporate agenda and provokes the interest of the academic community, governments, and policymakers. The Circular Economy paradigm is seen as a better solution and more sustainable alternative to the current linear system. To realize the benefit of the CE, new thinking and new business models are required. So far, there is limited progress has been achieved regarding the implementation of the Circular Economy. Therefore, scholars strive to understand the phenomena, providing conceptualizations, new strategies, and new business models, lacking empirical testing. The purpose- this study is mainly conducted to test empirically a set of influencing factors that include drivers which stimulate SMEs to implement Circular Business Models and the barriers that prevent or complicate the implementation process. Methodology- in order to fulfill the research objective, qualitative research with a multiple-case study approach is employed, focusing on three Swedish SMEs that operate in three different sectors. Findings- the outcome empirically confirmed that organizational drivers related to leadership and organizational culture, resource availability including technology and knowledge, financial factors, product and process development, society, environment, and stakeholder pressure, geographical proximity, entrepreneurship, and bran strengthening are seen as driving and facilitating factors to implement Circular business model. While, the lack of supportive regulation and policies, consumer behaviors related to single-use culture, the nature of the product and material, and the presence of incompatibility and monopoly in the supply chain are observed as major barriers.

Circular economy (CE) is seen as a strategy to achieve sustainable development, requiring commitment and support from multiple actors on all system levels; from companies and products to governments and nations. Circular business models (CBMs) are regarded as an important leverage to implement circularity at an organizational level, and business support is considered an important enabler of these. Communication between practitioners and policy-makers, as well as understanding the barriers of CE in the local context, can facilitate the development of efficient business support. This thesis has from a company perspective explored barriers to circular business model innovation (CBMI) and the impact of firm-specific business support activities on this innovation process. This was done through a multiple-case study of ten Swedish SMEs who had received direct business support for circularity, and thus had initiated a circular project. The study has identified seventeen different barriers across five categories, spanning over the entire innovation process from idea to full implementation. Overall, economic viability appears to be an important factor which relates to and depends on several other barriers, and the novelty of CE contributes to the occurrence of many identified challenges. While some barriers are more common across all ten cases, often challenges related to market demand, financing and knowledge, others are more specific for each case and circular strategy. Furthermore, this study has found that coaching, training, and funding are firm-specific activities that can help SMEs overcome mainly internal barriers in the early stages of the CBMI process, addressing several of the most common barriers identified in this study. This research has also included a company perspective on the costs and benefits of the activities, and pointed at important factors to consider in the development of future business support. / Cirkulär ekonomi ses som en strategi för att uppnå hållbar utveckling, och kräver engagemang och stöd från flertalet aktörer på samtliga systemnivåer; från företag och produkter till regeringar och nationer. Cirkulära affärsmodeller betraktas som en viktig hävstång för att implementera cirkularitet på en organisatorisk nivå, och företagsstöd anses vara en viktig möjliggörare av dessa. Kommunikation mellan utövare och beslutsfattare, samt förståelse för barriärer till cirkulär ekonomi i det lokala sammanhanget, kan underlätta utvecklandet av effektiva företagsstöd. Denna uppsats har ur ett företagsperspektiv utforskat barriärer till cirkulär affärsmodellsinnovation och den inverkan som företagsstöd har på denna innovationsprocess. Detta utfördes genom en fallstudie av tio svenska små och medelstora företag som mottagit stöd för cirkularitet, och som således initierat ett cirkulärt projekt. Studien har identifierat sjutton barriärer inom fem kategorier, vilka sträcker sig över hela innovationsprocessen från idé till full implementation. Generellt framträder ekonomisk livskraft som en viktig faktor, relaterad till samt beroende av flertalet andra barriärer, och nymodigheten i cirkulär ekonomi bidrar till förekommande av flera identifierade barriärer. Medan vissa barriärer är mer vanligt förekommande bland de tio fallen, ofta utmaningar relaterade till marknadens efterfrågan, finansiering och kunskap, är andra mer specifika för varje fall och cirkulär strategi. Vidare finner denna studie att rådgivning, träning och finansiering är företagsspecifika aktiviteter som kan hjälpa små och medelstora företag att överkomma huvudsakligen interna barriärer i de tidiga faserna av cirkulär affärsmodellsinnovation, och som bemöter flertalet av de vanligaste barriärerna som har identifierats i denna studie. Denna studie har även inkluderat ett företagsperspektiv på aktiviteternas nytta och kostnader, samt belyst viktiga faktorer att ta hänsyn till i utvecklingen av framtida företagsstöd.

The Circular Business Model (CBM) is one way to achieve a more sustainable future. Its goal is to reduce the use of natural resources which are becoming more scarce on our planet. The aim of the study is to investigate the consumer behavior and the determinants of the willingness to adopt Product Service System (PSS), one of the models of CBM. Through previous research, five main factors were identified: Economical Value, Flexibility, Trust, Desire to Own and Peer Influence. Furthermore, some literature argue that environmental awareness has an influence on the consumers’ choice of consumption. Therefore, this factor is considered and used as a moderating variable in the conceptual model. The primary data was collected through an online questionnaire and the hypotheses were tested through multiple regression analyses. Seven out of the twelve hypotheses were accepted. The study also concludes that environmental awareness does not have a high impact on the model. The environmental awareness did only have a positive moderating effect in the peer influence factor. It was determined in the study that economical value has the highest impact on the model.

The fashion industry has for several years been driven by fast cycles of cheap industrial mass production and unsustainable consumption. At the same time the burden on the environment has been significant. New business models to prevent the environmental impact have therefore been developed, and circular business models have gained interest. Remanufacturing as one of the central activities within circular business model is not a new concept for the fashion and apparel industry, but there is a lack of focus of how to prioritise and develop the concept. The focus of the study is to understand the relative importance of the challenges and the enabling conditions that influence the adoption of remanufacturing as transition towards a circular economy within the fashion and apparel industry. The purpose is also to show the practitioners’ perspective on a relatively new phenomenon within the fashion and apparel industry, which can clarify how to further prioritise and direct the development of the concept. Furthermore, it is also expected to identify and investigate what might be the main challenges and the enabling conditions within remanufacturing. This research is conducted through a mixed method with a deductive approach where knowledge about generic challenges and the enabling conditions within remanufacturing was collected from a systematic literature review, as a modification of a Delphi method. An utilisation of online questionnaires led to verify relative importance of challenges and the enabling conditions for an adoption of remanufacturing as a transition towards a circular economy within the fashion and apparel industry. The result from the online questionnaire was analysed through finding consensus among the collected data. The result shows that the most important perspective for an adoption of remanufacturing was related to business model-, costs- and consumer perspective. Specifically, the challenge with how to change the business model seemed to be essential, and the lack of financial benefits and influencing the consumer behaviour was received to be of great importance. Identified enablers were collaborations and communication. There was no agreement among the most important challenges and the enabling conditions. However, the operations- and core- perspective where considered important by many. Significant consensus was found between the practitioners and their opinion about what influences an adoption of remanufacturing as a transition towards a circular economy. The practitioners’ verification and opinions of challenges and the enabling conditions can serve as support for managers in an adoption of remanufacturing, and provide guidance regarding what is essential to consider for an transition towards a circular economy. This study highlights and identifies what motivates and makes the adoption of remanufacturing attractive, as a way to transition towards a circular economy, in particular it provides support and guidance regarding how strategies can be developed and where to focus further development.

The transport sector is one of the main contributors to greenhouse gas emissions worldwide. A current solution to this problem is the introduction of electric vehicles into our transport fleets. However, this solution comes with its challenges; for instance, the environmental impact of batteries once they reach their end-of-life. The circular economy is an approach to manage ecological electromobility issues while providing economic and societal wellbeing. A starting point for the implementation of a circular economy can be found in the implementation of circular business models. Because the circular economy requires its actors to think in systems, the collaboration between multiple stakeholders is essential. However, most circular business model frameworks are focusing on the focal firm, which is not sufficient to encourage cross-collaboration between organizations. Therefore, this study outlines the development of a new framework that focuses on a multi-stakeholder perspective. I propose the “framework for multi-stakeholder circular business model innovation” to explore win-win-win scenarios for the management of 2LB. I conducted a study in collaboration with Svealandstrafiken, Mälarenergi and Västerås Stad. The organizations were involved in data collection via a series of interviews and the validation of the framework through a workshop. The proposed framework consists of a process of four phases subdivided into eight steps that meant to address key challenges organizations are facing to achieve circularity. Within these four phases, the framework encourages discussions on shared values and visions between all stakeholders at an early stage. As a consequence, better collaborations and relationships are formed, which positively benefits the development of circular business models.

Moving towards a more circular economic model is necessary in order to secure the sufficiency of vital raw materials and to achieve a balance between both economic and environmental prosperity. However, the discussion regarding circular economy from a business perspective is still rather limited, and the practical applications of circular economy are mostly related to waste management and industrial applications. Needless to say, circular economy is much more than just large-scale recycling. Circular economy, as a system which aims to ensure a more circular flow of resources, materials and energy, can embody a variety of expressions from closing resource loops to redesigning products, services and the nature of ownership towards favoring renting, sharing, reusing and other alternative ways of maximize the resource efficiency and extend product life. Hence, the principles of circularity can be applied across all industries, instead of just those operating in the industrial sector. Standing on the way of the development of a global circular economy is the perceived mismatched objectives of profit seeking businesses and sustainability advocators. Businesses want high sales levels and profit margins, whereas at the core of environmental sustainability is often to promote conscious consumption and cut down on activities resulting in pollution and waste. And because circular economy is often strongly associated with sustainability matters, businesses tend to stray away from it as it is considered to work against a company’s purpose of making profit. Yet here is the catch – instead of seeing circular economy just as a sustainability tool, it can also be considered as a viable business opportunity which when effectively exploited, can be a source of competitive advantage and a source of economic value

This research looks into the emerging trend of circular economy which is fairly young, but have still gotten a lot of recognition in the past few years. The purpose of the research was to identify bridging activities between circular business models and customer perceived value. This gap creates a great opportunity to find correlations between these areas to hopefully construct the missing bridge to connect the phenomena. A case study was applied on an organisation having a circular business model, where its customer network was used to collect data. Two types of data collection methods were used: (1)Quantitative data collection from potential customers using a questionnaire;and (2) Qualitative data collection from existing customers with semistructured interviews. The collected data was later analysed by connecting it to existing theory of customer perceived value. The data was categorised, ranked and later inserted in a contemporary matrix created by the authors, called the Business Model Matrix. The whole research was lastly presented as a conceptual model with the intent to generalize the methodology so it could be applied on other organisations. The model consists of five steps: (1) Research, (2) Data collection, (3) Translation, (4) Business Model Matrix and (5) Adaption.The authors conclude this research with: (1) It is difficult to quantify and make sense of value; (2) Standardised measurements for value has to be defined; and (3) Even though it might be difficult to interpret the business model matrix result, it might give a good overview of what the customers likes which can increase competitiveness in the long-term. Suggested future research lies in standardising value and looking into perceived value from other actors rather than customers as well.

As customers become more and more aware of the threats and limits of the current economic system, joined with the pressure of environmental policies, companies are pressured to rethink their offerings, processes, and business models in order to accelerate the transition to a circular economy. This transition requires significant changes in habits and behaviors, but simultaneously it offers opportunities for innovation. In this regard, business model innovation plays an essential role in enabling this transition via circular business models that close the loop. For the successful development, implementation, and adoption of new business models, a depth understanding of customers' needs is fundamental. However, little is known about the customer perceptions, motivations, and willingness to participate in circular economy. To address this gap, the study explores the transition to circular economy from the customers' perspective by employing a qualitative single case study bounded to the furniture retail company, IKEA, specifically the IKEA Second-Hand pilot store in Eskilstuna, Sweden. Through in-person interviews, observations, and a questionnaire, data from customers donating their used furniture to the recycling mall ReTuna, people discarding furniture at the recycling station, and people selling and giving away their used furniture via the social media platform Facebook, was captured to explore the customer experience in the after-use phase of furniture. Findings of the study present opportunities for the case company to strengthen its product recovery strategies.

Bakgrund: Cirkulär Ekonomi är ett begrepp som växt sig starkare under senare år i takt med att hållbara frågor fått en större roll i samhället. Till följd av detta har olika affärsmodeller som främjar CE blivit allt vanligare, och däribland återfinns funktionsförsäljning. Det finns en stor mängd forskning kring hur en implementering av funktionsförsäljning påverkar olika delar i en affärsmodell och vad som bör has i åtanke för att det ska bli ett lyckat skifte. Något som inte diskuteras lika mycket är de finansiella implikationerna som medförs vid övergången till funktionsförsäljning, och vad de får för betydelse ur ett finansiellt perspektiv och företags kassaflöde. Syfte: Syftet med studien är att undersöka hur olika delar i affärsmodellen förändras vid ett skifte till funktionsförsäljning samt vilka finansiella implikationer det får, med särskilt fokus på kassaflödesförändringar. Vidare avser studien att studera vilken betydelse förändringarna i kassaflöden får med avseende på lönsamhet och risk. Metod: Studien är en kvalitativ fallstudie som har utförts med en abduktiv ansats och pragmatism som vetenskaplig utgångspunkt. Det empiriska materialet har dels samlats in genom semistrukturerade intervjuer och dels genom dokumentstudier. I val av fallföretag användes två urvalsmetoder, bekvämlighetsurval samt målstyrt urval. Slutsats: Studiens resultat visar på att flera förändringar sker i kassaflödet vid ett skifte till funktionsförsäljning, både i form av att befintliga kassaflöden förändras och att nya kassaflöden tillkommer. Förändringarna som sker berör både stora utbetalningar på grund av ett större ansvar och åtagande mot kund, samt betydande inbetalningar till följd av nya inkomstmöjligheter. Vidare har det framgått att förändringarna medför ett väsentligt större risktagande till följd av att ägarskapet stannar kvar hos säljaren, men att det även finns god potential till att uppnå en högre lönsamhet än vid en traditionell affärsmodell. / Background: Circular Economy is a concept that has grown in recent years as sustainability issues have been given a greater role in society. As a result, various business models that encourage CE have become increasingly common, including functional sales. There is a large amount of research regarding how the implementation of functional sales affects different parts of a business model and what should be considered to make the shift successful. Something that has not been discussed as much is the financial implications that come with a transition to functional sales, and what significance they have from a financial perspective and for the cash flows of companies. Research aim: The aim of this study is to investigate how different parts of the business model change in a shift to functional sales and what financial implications it causes, with a special focus on the cash flow changes. Furthermore, the study intends to study the significance of the changes in cash flows with regards to profitability and risk. Method: The study is a qualitative case study that has been carried out with an abductive approach and pragmatism as a research paradigm. The empirical material has been collected partly through semi-structured interviews and partly through document studies. In the selection of case company, two sampling methods were used, convenient sampling and targeted sampling. Findings: The result of the study implies several changes that occur in the cash flow at a transition to functional sales, both in the case of already existing cash flows, but also that new are added. Changes that occur partly affect the payments of the company due to a greater responsibility and commitment towards customers, and also partly the received payments due to new income-opportunities. Furthermore, the study indicates that the changes lead to a significantly greater risk as a result of the ownership remaining with the seller, but it also indicates that there is good potential for achieving higher profitability compared to the traditional business model.

Bakgrund: Funktionsförsäljning är en affärsmodell som vuxit sig stark på senare år som följd av ett ökat intresse kring cirkulär ekonomi. Trots detta finns det ingen kalkyl utformad för att spegla den nya verklighet som funktionsförsäljning medför. Många företag förstår sig inte på de förändrade processer och kostnader som en övergång från en linjär affärsmodell till funktions-försäljning innebär. Då en kalkyl ligger till grund för beslutsfattande som avser att bidra till lönsamhet, är det ett problem att det inte finns en kalkyl som avspeglar den nya verkligheten vid funktionsförsäljning på ett rättvist sätt.  Syfte: Syftet med denna studie är att undersöka hur och varför kostnader förändras i olika processer i tillverkande företag som övergår från en linjär affärsmodell till funktionsförsäljning. Vidare syftar denna studie till att undersöka hur dessa kostnadsförändringar påverkar vad som bör beaktas vid utformandet av en kalkyl. Metod: Denna studie har genomförts med pragmatismen som vetenskaplig utgångspunkt. Ett iterativt angreppssätt har använts för studien. Vidare har en kvalitativ forskningsdesign använts, där två enkla fallstudier genomförts. Fallföretagen valdes ut genom målstyrt urval samt bekvämlighetsurval. För datainsamling har semistrukturerade intervjuer genomförts. Respondenterna valdes ut genom ett snöbollsurval. Den valda analysmetoden är en cross-caseanalys i kombination med en tematisk analys.  Slutsats: Resultatet av denna studie visar att funktionsförsäljning, trots dess stora initiala investeringar, har potential att leda till kostnadsbesparingar på lång sikt. I syfte att rättvist återspegla det förlänga ansvar som funktionsförsäljning medför, bör tidsperspektivet för kalkylen förlängas. Resultatet visar att flertalet processer påverkas vid en övergång till funktionsförsäljning. Det har framkommit att betydelsen av design har utvidgats i kontexten av funktionsförsäljning, då denna process har stor inverkan på efterföljande processer. Vidare har det framkommit att ett övervakande system innehar en central roll vid funktionsförsäljning då det innebär en större kontroll av kostnaderna, däribland reparation och underhåll samt kostnader för omvänd logistik. Slutligen har det konstaterats att processerna försäljning och relationer blir viktigare. Dessa kostnadsförändringar bör således återspeglas i kalkylen. / Background: Functional sales is a business model that has grown strongly in recent years as a result of increased interest in the circular economy. However, there is no costing model designed to reflect the new reality that functional sales bring. Many companies do not understand how a transition from a linear business model to functional sales affect processes and costs. Since a costing model is the basis for decision-making that aims to contribute to profitability, it is a problem that a costing model which reflects the new reality in functional sales in a fair way does not exist.  Purpose: The purpose of this study is to investigate how and why costs change in different processes in manufacturing companies that transition from a linear business model to functional sales. Furthermore, this study aims to investigate how these cost changes affect what should be taken into consideration when designing a costing model.  Method: This study has been conducted with pragmatism as a scientific starting point. An iterative approach has been used for the study. A qualitative research design has been used, where two simple case studies have been carried out. The case companies were selected through a targeted selection and convenience sampling. For data collection, semi-structured interviews have been conducted. The respondents were selected through a snowball sampling. The selected method of analysis is a cross-case analysis in combination with a thematic analysis. Results: The results of this study show that functional sales, despite their large initial investments, have the potential to lead to cost savings in the long term. In order to fairly reflect the extended responsibilities that function sales entail, the time perspective for the costing model should be extended. The study has shown that several processes are affected by a transition from a linear business model to functional sales. It has emerged that the importance of design has expanded in the context of functional sales, as this process has a major impact on subsequent processes. Furthermore, it has emerged that a monitoring system has a central role in functional sales as it involves greater control of costs, including repair and maintenance and reverse logistics costs. Lastly, it has been found that the processes of sales and relationships become more important. These changes in costs should thereof be reflected in the costing model. / Mistra REES