7.4 Circular Business Models As an example, the following sections will briefly show how entrepreneurial behaviour can lead to different forms of innovation that benefit the circular economy. The strategies mentioned result from work by Atasu et al. (2021) related to product manufacturing. Retain Product Ownership Retain Product Ownership (RPO) is a business model where the producer or manufacturer retains ownership of a product and provides it to the customer through renting or leasing rather than selling it outright. This approach shifts the focus from a traditional one-time sale to a long-term service-oriented relationship with the customer. An example is the servicing model in the aviation sector, which is offered by Rolls-Royce, who pioneered Power-bythe-Hour maintenance agreements under which it charges customers based only on the actual flying hours of the engines. The sustainability of these initiatives is often debated. However, carsharing services, as an example, do contribute to a form of ”dematerialisation” by reducing the total number of vehicles needed. A single vehicle can serve multiple customers at different times, leading to more efficient fleet utilisation. This, in turn, lowers the overall production volume of cars, which benefits the environment by reducing emissions associated with manufacturing and decreasing the consumption of raw materials. By optimising the use of fewer resources, car-sharing models offer a promising step toward more sustainable urban mobility. Product Life Extension Product Life Extension (PLE) is a strategy where companies prioritise designing products that are durable and built for longevity. By reducing the need for frequent replacements, this approach also promotes the development of secondary markets for used products. While it may seem counterintuitive for original equipment manufacturers (OEMs), the success of the ”Made in Germany” brand demonstrates that customers highly value exceptional quality, precision, and durability. Design for Recycling Design for Recycling (DFR) is a strategy where companies redesign their products and manufacturing processes to ensure that materials can be easily recovered, repurposed, or reused in new products at the end of their lifecycle. The goal of DFR is to minimise waste by maximising the recoverability of materials, thus promoting sustainability and reducing environmental impact. 7.5 Challenges Incorporating Sustainable Business Modelling It is often observed that an inferior technology can outpace and surpass more sophisticated alternatives in market adoption. For instance, the transition from 8-inch to 5.25-inch floppy disk drives demonstrates this phenomenon. Despite being introduced in 1976 with lower capacity and performance, the 5.25-inch drive gained dominance due to its compatibility and suitability for the rapidly growing personal computer segment, showcasing how market fit often outweighs technical superiority. 41 7.5 Challenges Incorporating Sustainable Business Modelling
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