Original title: Business Model Bundles: Implications for Innovation in the Circular Economy
A circular economyAn approach that aims to keep products and materials in use rather than letting them become waste. aims to keep products and materials in use rather than waste them. Some customers resist business models that support this, so manufacturers may struggle to get them accepted. The study describes a business modelThe way an organization creates value for customers and earns value in return. bundle: one contract that offers several ways to use or pay for a product, with the option to switch between them over time. This flexibility may make customers more willing to try a circular option, but a bundle does not automatically lead to more circularity.
Imagine agreeing to a household chore plan with several ways to divide the work. It is hard to commit when you do not know which arrangement will suit you, and a rigid plan can make the whole deal feel risky. In this paper, the chore arrangements are different business models, while the shared plan is one contract that lets customers switch arrangements over time.
Manufacturers trying to offer circular products can face customers who resist changing how they buy or use them. Bundling several business models in one flexible contract may lower the commitment customers face at the start, though the bundle still needs careful design to support circularity.
The study draws on four manufacturers offering 21 product-service system business models, so the abstract does not establish how broadly its findings apply. It reports evidence that flexibility can support customer acceptance, but does not claim that bundles always increase acceptance or circularity.
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Business Model Bundles: Implications for Innovation in the Circular Economy — Miying Yang, Stephen Evans — Journal of Product Innovation Management — doi:10.1111/jpim.70057
Abstract licence: CC BY
Explanation generated by Synthesis from the abstract — it is not the original paper.