Topic 1 Circular Economy Business Model

Source: Adapted from Business Model Generation (Osterwalder and Pigneur, 2010)

Customer Relationships

  • Long-term or Recurring: For example, a subscription, a long-term partnership service, and so on
  • Transactional: A single sale or a one-time transaction

Customer Segments

  • New customer segment: A different customer segment is being sold to
  • Vertical customer: Customer who is not part of the main product value chain


  • Re-sale channel: A different sales channel from sales of “new” products
  • Return channel: A collection or return channel for a product that has reached the end of its useful life
  • Secondary material markets: Markets for the trade of reclaimed materials (co-products, scrap, recycled, etc.)

Revenue Streams

  • Product sale Revenue: Sale of product, component or material (customer-owned)
  • Service sale Revenue: Sale of service only (no ownership)
  • Bundled product-service sale Revenue: Sale of product and service bundle (customer-owned)
  • Waste-as-value: Stream of revenue from waste or co-products that are reused rather than discarded

Key Activities

  • Product design: Design for repair, maintenance, disassembly, remanufacturing, recyclability, material substitution etc)
  • Reverse Logistics: Executed in-house by the company
  • Service Provision: Provision of “product-as-service” and/or value-added services (e.g. preventative maintenance, asset diagnostics etc)
  • Key Partners
  • Circular Materials supplier: Supplier of circular materials
  • Reverse Logistics: Provided by a third party
  • Technology: Partners providing key technologies

Key Resources

  • Asset management Platform: Booking, paying, tracking assets
  • Specialized Production process: Specialized processes and facilities (e.g. remanufacturing, 3D manufacturing etc)
  • Assets: Assets or product stock available to provide as a service

Cost Structure

  • Financial Incentive: To incentive take-back or return of product
  • Labor: Labor cost
  • Materials: Materials cost
  • Financing cost: Costs of customer financing
  • Waste Disposal: Cost of disposing waste outputs
  • Lower (lifetime) Cost: A lower product cost or a lower end-user lifetime cost of ownership.
  • Performance: Provides the outcome and level of performance that corresponds to the “job-to-be-done” of a client (e.g. equipment up-time, output etc.). Models of product-service systems are included.
  • Access: On-demand availability, flexibility, and a wider selection of options. Pay-as-you-go, rental, and lease are some of the options.
  • Sustainability: Provides a customer-valued outcome related to sustainability (environmental, social etc.)
  • Value delivered to a “vertical client” outside of the main value chain is referred to as co-value.