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Upscaling Circular Business Models in Fashion Retail Value Chains
University of Borås, Faculty of Textiles, Engineering and Business. (Textile Value Chain Management (TVCM))ORCID iD: 0000-0002-7751-4566
2021 (English)Licentiate thesis, comprehensive summary (Other academic)
Sustainable development
According to the author(s), the content of this publication falls within the area of sustainable development.
Abstract [en]

The textile industry is currently operating in an unsustainable manner that is based on overproduction and wasteful, resource-draining practices. Therefore, recently, the concept of circular economy has been presented as a possible solution and a way forward. Changing linear economy business practices and basing them on the circular economy concept is anticipated to solve social and environmental problems while maintaining economic growth. However, fashion retail value chains essentially depend on the logic of mass production, fast fashion, and linear take-make-dispose models. Presently, circular initiatives in this context are rather limited. This thesis posits that circular business model (CBM) scalability is an important factor in the transition to a circular economy in the fashion retail value chain, and thus, a more sustainable fashion industry.

Therefore, the purpose of this thesis is to further the understanding of CBM scalability in the context of fashion retail value chains. This includes expanding the notion of scalability to cover a more holistic perspective that goes beyond increasing production output solely for economic gains. Additionally, this involves enhancing the understanding of the required specific resources and capabilities that CBMs must have or develop to overcome challenges and increase their potential for scalability. Accordingly, this thesis covers three papers that utilise qualitative methods wherein archival material, such as peer reviewed journal articles and industry reports, as well as interviews with practitioners are used.

Moreover, the extension of the notion of business model scalability goes beyond the boundary of the organisation and encompasses three different perspectives, namely, efficiency, adaptability, and altruism. In addition to this, three areas that challenge CBM scalability are identified. These challenges stem from different business model design themes and can be described as (i) inefficiency, (ii) lack of know-how and out-of-the-box solutions, and (iii) unfamiliarity resulting in scepticism and dissonance with current practices and policy. Finally, the thesis contributes to the CBM literature by utilising the theoretical lenses of resource-based theory and dynamic capabilities theory to identify resources and dynamic capabilities that are strategically important for scaling CBMs. This thesis expands the notion of scalability by going beyond the boundary of the single organisation as well as including a triple bottom line perspective, thus providing an important addition to the understanding of the scalability of CBMs. 

Abstract [sv]

Textilindustrin verkar för närvarande på ett ohållbart sätt som bygger på överproduktion och resurskrävande metoder. Cirkulär ekonomi som koncept, har därför nyligen presenterats som en möjlig lösning på de problem som industrin står inför. Genom att frångå linjära praxis och istället bygga affärsmetoder på cirkulär ekonomi förväntas sociala och miljömässiga problem kunna lösas samtidigt som den ekonomiska tillväxten bibehålls. Modeindustrins värdekedjor bygger dock fortfarande huvudsakligen på massproduktion, fast fashion och linjära take-make-dispose-modeller. Cirkulära initiativ är i detta sammanhang ganska begränsade. Denna avhandling framhäver därför, att skalbarhet av cirkulära affärsmodeller är en viktig faktor i övergången till en cirkulär ekonomi, och därmed en mer hållbar modeindustri.

Syftet med denna avhandling är följaktligen att öka förståelsen för skalbarhet av cirkulära affärsmodeller inom modebranschens värdekedjor, med fokus på detaljhandeln. Innefattat i detta är ett utvidgat begrepp av skalbarhet, som inkluderar mer än enbart ökad produktion för ekonomisk vinst. Till detta hör även en ökad förståelse av de specifika resurser och förmågor som cirkulära affärsmodeller måste ha eller utveckla för att övervinna utmaningar och bli mer skalbara. Avhandlingen omfattar tre artiklar som använder kvalitativa metoder där arkivmaterial, såsom refereegranskade journalartiklar och branschrapporter, samt intervjuer med personer verksamma i branschen, används.

Resultatet påvisar att cirkulära affärsmodellers skalbarhet går bortom organisationens gränser och omfattar tre olika perspektiv: effektivitet, anpassningsförmåga och altruism. Utöver detta identifieras tre områden som speciellt utmanande för skalbarheten. Dessa utmaningar härrör från två olika designteman av affärsmodeller och kan beskrivas som (i) ineffektivitet, (ii) bristande kunskap och brist på färdiga lösningar, och (iii) obekantskap som resulterar i skepsis och dissonans med nuvarande praxis och policy. Slutligen bidrar avhandlingen till litteraturen om cirkulära affärsmodeller genom att använda resursbaserad teori och dynamiska förmågor-teori för att identifiera resurser och dynamiska förmågor som är strategiskt viktiga för skalbarhet av cirkulära affärsmodeller. Avhandlingen bidrar således till kunskapen om cirkulära affärsmodellers skalbarhet genom att utvidga begreppet till att även innefatta aktiviteter som sträcker sig utanför den enskilda organisationen, samt inkludera ett triple bottom line-perspektiv. 

Place, publisher, year, edition, pages
Borås: Högskolan i Borås, 2021.
Series
Skrifter från Högskolan i Borås, ISSN 0280-381X ; 120
Keywords [en]
circular business models, fashion industry, scalability, resource based theory, dynamic capabilities, retail value chain
Keywords [sv]
cirkulära affärsmodeller, modeindustrin, skalbarhet, resursbaserad teori, dynamiska förmågor, värdekedjor
National Category
Business Administration
Research subject
Textiles and Fashion (General)
Identifiers
URN: urn:nbn:se:hb:diva-26225ISBN: 978-91-89271-38-8 (print)ISBN: 978-91-89271-31-9 (electronic)OAI: oai:DiVA.org:hb-26225DiVA, id: diva2:1585033
Supervisors
Note

Delvis finansierat av Handelsbankens forskningsstiftelser (Jan Wallander and Tom Hedelius Foundation, Tore Browalds Foundation)

Available from: 2021-08-16 Created: 2021-08-16 Last updated: 2021-08-16Bibliographically approved
List of papers
1. Lessons on business model scalability for circular economy in the fashion retail value chain: Towards a conceptual model
Open this publication in new window or tab >>Lessons on business model scalability for circular economy in the fashion retail value chain: Towards a conceptual model
2021 (English)In: Sustainable Production and Consumption, ISSN 2352-5509, Vol. 28, p. 686-698Article in journal (Refereed) Published
Abstract [en]

Circular economy and especially circular business model (CBM), is currently being discussed as a way to enable the fashion industry's transition to sustainable business models wherein pollution and resource waste may be reduced. However, one of the prime reasons for a slow transition is lack of scalability of CBMs operating in the fashion retail value chain. What is lacking in the current discourse is research that summarises and condenses the literature on strategies for how scalability can be attained and what that means in context to CBMs where not only economic values are in focus. Therefore, the main purpose of this paper is to explore the main strategic approaches to scale business models and how these can be applied to CBMs in the fashion retail value chain. To do this, a two-part method is adopted consisting of a systematic literature review of 57 business models and scalability papers followed by a review of activities reported by 76 fashion retail companies on how these have, or are planning to, increase the scale of their CBM initiative. Our suggested model provides a basic understanding of strategies for business model scalability seen from four different business model design perspectives. These are further contextualised for CBMs in the fashion value chain and lessons learned are generated in the form of four central propositions. The propositions account on how organisations can leverage resources from their existing conventional business model for efficient scaling of their CBM initiative, how they can consider strategic partnerships to access complementary resources, while also embarking on adaptability by running business pilots either internally or by engaging in collaborative networks for industry-wide learnings and change.

Place, publisher, year, edition, pages
Elsevier, 2021
Keywords
Circular business model, Fashion industry, Scalability, Retail value chain
National Category
Business Administration
Research subject
Textiles and Fashion (General)
Identifiers
urn:nbn:se:hb:diva-26223 (URN)10.1016/j.spc.2021.06.033 (DOI)000682955300051 ()2-s2.0-85109615488 (Scopus ID)
Note

The authors would like to thank Jan Wallanders and Tom Hedelius Stiftelse (P18–0057) for financing the research for this paper.

Available from: 2021-08-16 Created: 2021-08-16 Last updated: 2024-05-03
2. Scaling resale-based circular business models: a study of Swedish fashion resellers
Open this publication in new window or tab >>Scaling resale-based circular business models: a study of Swedish fashion resellers
2021 (English)In: 4th PLATE 2021 Virtual Conference, 26-28 May 2021, Limerick, 2021Conference paper, Published paper (Refereed)
Abstract [en]

In this paper we present challenges that resale-based circular business models (CBMs) face when trying to scale up, as well as strategic resources that mitigates these challenges and facilitate scaling. The study is anchored in empirical findings from 10 retail companies operating with resale initiatives in the Swedish market. To structure the study, and provide a broader view of scalability that better fit the logic of CBM value creation, we draw on two streams of literature; the notion of novelty and efficiency-centred business model design elements and resource-based theory. The findings show that for resale-based CBMs to scale, these need to overcome challenges related to operational complexity in connection to handling large volumes of unique garments as well as lack of out-of-the box solutions. The study also offers insights into strategic resources and capabilities which can work as guidance for practitioners who want to analyse and manipulate their CBM's ability to scale

Place, publisher, year, edition, pages
Limerick: , 2021
Keywords
circular business models, CBM, scalability, resale, fashion value chain
National Category
Business Administration
Research subject
Textiles and Fashion (General); Textiles and Fashion (General)
Identifiers
urn:nbn:se:hb:diva-25735 (URN)
Conference
4th Conference on Product Lifetimes and the Environment (PLATE), Virtual Conference, 26-28 May, 2021
Available from: 2021-07-05 Created: 2021-07-05 Last updated: 2021-08-16

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Hultberg, Emelie

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