The ecological concerns that promote circularity often overshadow that circular business models can help companies increase profits and enter into new markets.
In this article, we'll discuss circularity, compare it to the traditional lineal model, and look into case studies of current companies tapping into the multifaceted benefits of the circular economy in order to expand their business and increase profits. Circularity is not just an ecological approach to save resources and decrease waste; it can be a business savvy path for growth.
The circular economy functions in contrast to the traditional lineal economy, which follows a "take, make, dispose" pattern. In a circular economy, resources are used more sustainably through practices such as recycling, reusing, remanufacturing, and refurbishing. Embracing circularity can lead to an overall decrease in the extraction of raw materials, reduced consumption of fossil fuels, as well less pollution and waste. In turn, these results can benefit the performance of companies.
RESOLVE Framework, NgenForce design.
As companies tap less into resources and put out less waste, their organizations will experience less governmental regulation, volatility in resource prices, and exhaustion of natural systems and reserves - all of which can enhance their performances. As a result, the benefits of adopting a circular economy aren't just cleaner air, high quality water, and less trash. In fact, circular models can help companies swerve challenges that result from lineal models.
Here are some examples of how leading companies are implementing circular business models to increase profits and expand into new markets:
Philips Refurbished Systems
Philips enables hospitals to upgrade their medical equipment (like MRIs and CT scanners) by trading-in their old equipment for a discount on new systems. Philips refurbishes and upgrades older equipment and sells it again. This business model helps hospitals get financial returns on their older equipment while efficiently upgrading to the latest technology. It also enables Philips to reach different customer segments with affordable, high-quality systems. This is an excellent example of a reuse business model that doesn’t necessarily require a lease construction.
The State of Kuwait
In Kuwait, one of the largest tire graveyards is being cleaned up, converting old "trash" tires into new rubber floor tiles, bricks, and tires for sale. This circular manufacturing harnesses lower costs for their production input, and creates a source of profit from what used to be trash, as well as a health problem for the surrounding population. Now, the state of Kuwait is selling a product to global markets and cleaning a site where they will construct thousands of houses for citizens.
A similar phenomena is occurring in Nigeria:
Nigera's transformation of waste into commercialized products
Often thought of as an ecological agenda, circularity is also a business forward approach to commerce.
Companies can leverage existent technology to transform waste and trash into a new products. The RESOLVE framework (regenerate, share, optimize, loop, virtualize and exchange) can be useful to find a point in production lines that is available to redesign into more a productive and efficient form.
Circularity is path that can lead to less mining, waste and pollution, as well as new sources of revenue and greater profits. Go circular for a cleaner world - and for profit.
Sources:
Brightest: brightest.io
The Board of Innovation: boardofinnovation.com
The World Economic Forum: weforum.org
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