Post on 24-Jun-2020
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CIRCULAR ECONOMY ADVANTAGE
Business Models for a Resource Constrained World
Key Elements to Remember
5 CIRCULAR
BUSINESS MODELS
3 DRIVING FORCES
FOR CIRCULAR
4 WASTES IN A
LINEAR ECONOMY
3 Drivers for Circularity
RESOURCE
SQUEEZECUSTOMER
CENTRICITY
TECHNOLOGY
DEVELOPMENT
Society needs
circularity
Innovation enables
new efficiencies
Consumption models
are changing
Circularity = Customer Centricity + Sustainability + Technology
Circular
TechnologyRemoves current
barriers
Customer centricityDelivers customer outcomes
SustainabilityImproves resource
utilization
Right purpose
Right efficiency
Rightdelivery
Germany
Res
ou
rce
us
e
Economic development
1
10
100
10,000 100,0001,000100
tons/
capita
India
China
The Linear Growth Model
!
Norway
Bangladesh
1
10
100
GDP/capita
Germany
Res
ou
rce
us
e
Economic development
1
10
100
10,000 100,0001,000100
tons/
capita
India
China
Norway
Bangladesh
10
GDP/capita1
100
RESORCE PRODUCTIVITY
IMPROVEMENT NEEDED
BY 2050: 4X
The Linear Growth Model
7
Enabling Technologies
Social
Mobile
M2M
Communication
Cloud
Analytics
3D Printing
Advanced
recycling tech
Trace and return
systems
Modular design
technology
Life & Material
sciences
Enabling entirely new ways to access and
understand product use-phase and aid
customers in use efficiency
Digital
Enabling moving physical objects back and
forth from value chains with digital services
to drive down cost
Hybrid
Enabling production and supply of new types
of resources as well as new product designs
to use them
Engineering
Transformation of the 4Ps of Marketing
PRODUCTEXPERIENCE
VALUE FOR MONEY
PEACE OF MIND
SENSE OF RESPONSIBILITY
CONVENIENCE
PRODUCT PRICE PLACE PROMOTION
”WHAT CAN I SELL IT FOR?”
”IT CAN STILL BE USED”
”THEY NOW WHAT TO DO”
”MY OLD ONE NEED TO GO”
”I CAN ACCESS THE LATEST”
”2ND HAND IS SO WORTH IT”
”FEELS GOOD TO RECYCLE”
”I DO NOT MIND SHARING”
”NOT OWNING STUFF SAVE TIME”
“NEW STUFF LASTS
LONGER”
“OTHERS WILL BREAK MY
HOUSE”
“NOT MY FAULT NOT MY
PROBLEM”
“OWNING GIVE ME
FLEXIBILITY”
“I WANT IT TO BE FULLY ADAPTED
TO ME”
”I CAN ACCESS THE LATEST”
Diverse Consumer Base
WASTED EMBEDDED VALUES
Logistics
Marketing& sales
Product
use
End of lifedisposal
Reverselogistics
Sourcing
Manufacturing
4 Types of Linear Wastes
WASTED RESOURCES WASTED CAPACITY
WASTED LIFECYCLES
Logistics
Marketing& sales
Product
use
End of lifedisposal
Reverselogistics
Sourcing
Manufacturing
MONETIZE WASTED CAPACITY
PREVENT WASTED LIFECYCLES
5 Business Models for Circular Advantage
RECOVER EMBEDDED VALUES
Circular Supply
Chain
REPLACE WASTED RESOURCES
advantage
BIOBASED - BIODEGRADABLERECYCLABLERENEWABLE ENERGY
MONETIZE WASTED CAPACITY
PREVENT WASTED LIFECYCLES
Logistics
Marketing& sales
Product use
End of lifedisposal
Reverselogistics
Sourcing
Manufacturing
Circular Supply
Chain Sharing Platform
RECOVER EMBEDDED VALUES
5 Business Models for Circular Advantage
SHARING PLATFORM SHARED PRODUCTSHARED USE
PREVENT WASTED LIFECYCLES
Logistics
Marketing& sales
Product use
End of lifedisposal
Reverselogistics
Sourcing
Manufacturing
Circular
Supply Chain Sharing
Platform
Product Life
ExtensionRECOVER EMBEDDED VALUES
5 Business Models for Circular Advantage
advantage
RESELL REPAIRUPGRADE
Recovery &
Recycling
RECOVER EMBEDDED VALUES
Logistics
Marketing& sales
Product
us
End of lifedisposal
Reverselogistics
Sourcing
Manufacturing
Circular
Supply Chain Sharing
Platform
Product Life
Extension
5 Business Models for Circular Advantage
18
PRE-CONSUMER RECOVERY INDUSTRIAL SYMBIOSIS POST-CONSUMER RECOVERY
Recovery & Recycling
Logistics
Marketing& sales
Product
us
End of lifedisposal
Reverselogistics
Sourcing
Manufacturing
Circular Supply Chain
Product as a Service
Product Life Extension
Sharing Platform
5 Business Models for Circular Advantage
SUBSCRIPTION PAY FOR UTILITYPAY FOR USAGE
Logistics
Marketing& sales
Product
us
End of lifedisposal
Reverselogistics
Sourcing
Manufacturing
Recovery & Recycling
Circular Supply Chain
Product as a Service
Product Life Extension
Sharing Platform
5 Business Models for Circular Advantage
Circular Value Creation Logic
The ‘Karlstad’ sofa example
LINEAR SETUP
IKEA revenue
Product age
New sale
$900
1st life
CIRCULAR ADVANTAGE SETUP
IKEA potential revenue
Product age
1st
life
2nd
life
3rd
life
4th
lifeEnd
of life
New sale
$900Second sale
$300New slipcover
$180Refurbish service
$100Recycling
$10
+65%
= $1.490
= $ 900
CUSTOMER VALUE FOR MONEY
MORE CUSTOMER INTERACTION
REDUCED FOOTPRINT
LOWER RISK
Copyright © 2017 Accenture All rights reserved. 23
It’s A Journey.
• Common Notion & Thinking
• Current Success & Heroes
• Internal Structures
• New Products & Services
• New Core Capabilities
• New ways of working &
governing
• All products & services
• All capabilities
• All ways of working &
governing
Copyright © 2017 Accenture All rights reserved. 24
Barriers do exists within companies
CircularPilots
Circular Company
Circular
EcosystemECOSYSTEM
ADOPTION
REGULATION
BUSINESS CASE
SILO STRUCTURES
LEGACY
IMMUNE SYSTEM
RECYCLING FOCUS
TECHNOLOGY
What’s Taking So Long?
DESIGN LOGISTICS FINANCE LEGALITY
Key Elements to Remember
5 CIRCULAR
BUSINESS MODELS
3 DRIVING FORCES
FOR CIRCULAR
4 WASTES IN A
LINEAR ECONOMY