Collaborative and circular business model

©photon_photo, image #133543535, 2017, source: Fotolia.com

Information

Impacts:
Sustainability Energy Substances Materials
Sector:
Cross-cutting
Investment cost:
High cost
Cost savings:
Total cost savings can range depending on the model applied and combination of activities
Cost:
High cost
Associated cost savings: Energy
15-50%
Co2 emission reduction:
Varies and depends on the sectoral focus and activities, e.g. CO2 reductions achieved in sustainable energy-related models such as ESCO
Size of company:
Micro (less than 10)

Changing the company business model can involve new services, products and approaches to sourcing resources and dealing with customers. The motivation could be to capitialise on a new value proposition aimed at current or new customers or to enter a totally new market niche.

Some new business models can result in substantial material- and energy savings via a shift from the 'traditional model' focusing on selling more products to models that emphasise the functionality, services, or benefits of the product. The resource efficiency is achieved because the service provider is motivated to extend the life-span of the product by making it more durable, reducing the need for spare parts, making it more energy efficient and improving the maintenance of the product.

Some business models focus on offering a certain quality standard or performance of a service. For example, promoting 'high-quality lubricants' for car engines instead of simply selling 'engine oil', or 'comfortable walking' instead of 'floor carpets'.

Some models focus on optimising the inputs, such as the energy, chemicals, detergents, or fertilisers. Examples here include energy service companies (ESCO), chemical management services (CMS), integrated pest management (IPM) and performance-based pest management (PPMS).

Renting- and sharing-based models are not new, but digital developments now make it easier, safer and more reliable to do it. The most known examples are car-pooling models like BlaBlaCar and short-term room- or house-letting services like Airbnb.

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