The Circular Business Model is a Development Tool in the Process of Transitionto a Circular Economy: Presenting a Model at the Level of Knowledge-based Companies

Document Type : Research Paper


1 Ph.D. Candidate in international entrepreneurship, Azad University of UAE

2 Associate Professor of Economics, Azad University, Science and Research branch

3 Professor of Business Management, Azad University, Science and Research branch


During the past decades, circular economy has become a fundamental and important issue in many developed countries in order to gain sustainable competitive advantage and create multiple values of economic development, social justice and environmental protection. But despite the importance of this issue, there is a lack of scientific research in this field as well as the design and development of circular business models as a transition economy tool in our country. Based on this, the purpose of this research is to design a circular economy business model for knowledge-based companies. This research is exploratory and fundamental-applied in terms of its purpose, and in terms of data collection, it is mixed research that analyzes information in the first (qualitative) stage of systematic foundation data theory and in the second (quantitative) stage of structural equation method.‌ In this research, 8724 initial open codes were identified, which were divided into ‌118 open codes,‌ 17 axial codes (stakeholders, value network, material and immaterial resources, key activities, revenue structure, cost structure, environmental conditions and external factors, input requirements and internal factors, user sector,‎end of consumption period, distribution channels, ‌customer relationship,‌value creation, value acquisition, value delivery,‌value proposition), and ‌6 selected codes (ecosystem, processes, financial structure, feasibility, user interface, value) that was divided in the framework of the paradigmatic model and the axial phenomenon (multiple values). In addition, the results of this study enable entrepreneurs to design a more appropriate executive framework for their business based on multiple values and common stakeholders using the circular economy business model


Main Subjects

  1. Akhavan, P., & Nabizadeh, M. (2016). Designing a Model for Knowledge Management at National Level Using Grounded Theory and Interpretive Structural Modeling. Journal of Science and Technology Policy, 8(4), 1-18 (In persion).
  2. Piispanen, V.V., Henttonen, K., & Aromaa, E. (2020). Applying the circular economy to a business model: an illustrative case study of a pioneering energy company. International Journal of Entrepreneurship and Innovation Management. 24. 236.
  3. Åström, J., Reim, W., & Parida, V. (2022). Value creation and value capture for AI business model innovation: a three-phase process framework. Review of Managerial Science,
  4. Attanasio, G., Preghenella, N., De Toni, A., & Battistella, C. (2021). Stakeholder engagement in business models for sustainability: The stakeholder value flow model for sustainable development, Business Strategy and the Environment, 31 (3), 860-874.
  5. Barros, M., Salvador, R., Prado, G., Francisco, A., & Piekarski, C. (2021). Circular economy as a driver to sustainable businesses. Cleaner Environmental Systems, 2.
  6. Benz, L.A. (2022). Critical Success Factors for Circular Business Model Innovation from the Perspective of the Sustainable Development Goals. Sustainability, 14, 5816.
  7. Bocken, N. (2021). Sustainable business models. Decent Work and Economic Growth. Encyclopedia of the UN Sustainable Development Goals; Leal Filho, W., Azul, AM, Brandli, L., Lange Salvia, A., Wall, T., Eds.
  8. Calvo-Porral, C., & Jean-Pierre, L.M. (2020). The Circular Economy Business Model: Examining Consumers’ Acceptance of Recycled Goods. Administrative Sciences,10 (2), 28.
  9. Corvellec, H., Stowell, A., & Johansson, N. (2022). Critiques of the circular economy, ‌Journal of Industrial Ecology, 26, 421-432
  10. De Kwant, C., Rahi, A.F., & Laurenti, R. (2021). The role of product design in circular business models: An analysis of challenges and opportunities for electric vehicles and white goods. Sustainable Production and Consumption27, 1728-1742.
  11. Pedersen, E.R.G., Earley, R., & Andersen, K.R., (2019). From singular to plural: exploring organisational complexities and circular business model design. Journal of Fashion Marketing and Management: An International Journal, 23(3), 308-326.
  12. Ellen MacArthur Foundation. (2013). Towards the Circular Economy: Economic and business rationale for an accelerated transition,
  13. Fallah Haghighi, , & Sharifi, Z. (2022). Developing a model for the growth stages of knowledge-based companies. Journal of Innovation and Value Creation, 20, 37-56 (In persion).
  14. Ferlito, R., & Faraci, R. (2022). Business model innovation for sustainability: a new framework. Innovation & Management Review, 19 (3), 222-236.
  15. Geissdoerfer, M., Pieroni, M., Pigosso, D., & Soufani, Khaled. (2020). Circular business models: A review. Journal of Cleaner Production, 277
  16. Han, J., Heshmati, A., & Rashidghalam, M. (2020). Circular economy business models with a focus on servitization. Sustainability12(21), 8799.
  17. Hernandez, M., & Bakthavatchaalam, V. (2022). Circular economy as a strategy in European automotive industries to achieve Sustainable Development: A qualitative study, Science-Policy Brief for the Multistakeholder Forum on Science, Technology and Innovation for the SDGs
  18. Hina, M., Chauhan, C., Kaur, P., Kraus, S., & Dhir, A. (2022). Drivers and barriers of circular economy business models: Where we are now, and where we are heading. Journal of Cleaner Production333, 130049
  19. Kanda, W., Geissdoerfer, M., & Hjelm, O. (2021). From circular business models to circular business ecosystems. Business Strategy and the Environment30 (6), 2814-2829.
  20. Kwiecień, K. (2020). CIRCULAR BUSINESS MODELS: A STAKEHOLDER THEORY PERSPECTIVE. Acta Universitatis Nicolai Copernici. Zarządzanie.
  21. Lüdeke‐Freund, F., Gold, S., & Bocken, M.P.N.)2019(.A Review and Typology of Circular Economy Business Model PatternsJournal of Industrial Ecology, Yale University, 23(1), 36-61.
  22. Mattos, A., Gabriela, S., Thiago L.M.A. (2022). Evaluation of circular business model: Theory of Change approach. Evaluation and Program Planning, 92, 102069.
  23. Mendoza, J.M.F., Gallego-Schmid, A., Velenturf, A.P., Jensen, P.D., & Ibarra, D. (2022). Circular economy business models and technology management strategies in the wind industry: Sustainability potential, industrial challenges and opportunities. Renewable and Sustainable Energy Reviews163, 112523
  24. Montabon, F., Pagell, M., Wu, Z. (2016), Making Sustainability Sustainable, Journal of Supply Chain Management, 52(2), 11-27.
  25. Mostaghel, R., & Chirumalla, K. (2021). Role of customers in circular business models. Journal of Business Research. 127, 35-44.
  26. Nußholz, J.L.K. (2017). Circular Business Models: Defining a Concept and Framing an Emerging Research Field. Sustainability, 9, 1810.
  27. Pizzi, S., Leopizzi, R., & Caputo, A. (2021). The enablers in the relationship between entrepreneurial ecosystems and the circular economy: the case of Management of Environmental Quality,
  28. Rizos, V., & Bryhn, J. (2022). Implementation of circular economy approaches in the electrical and electronic equipment (EEE) sector: Barriers, enablers and policy insights. Journal of Cleaner Production338, 130617.
  29. Salvador, R., Barros, M.V., Freire, F., Halog, A., Piekarski, C.M., & Antonio, C. (2021). Circular economy strategies on business modelling: Identifying the greatest influences. Journal of Cleaner Production299, 126918.
  30. Salvioni, Daniela., & Almici, Alex. (2020). Circular Economy and Stakeholder Engagement Strategy. Symphonya Emerging Issues in Management. 1, 26-44.
  31. Shadkar, F., Torabi, T. (2022). Entrepreneurial opportunities in the circular economy (1st.). Miyad Andisheh Publications, Iran, Tehran. [In Persian]
  32. Sterev, N. (2019). NEW INDUSTRIAL BUSINESS MODELS: FROM LINEAR TO CIRCULAR ECONOMY APPROACH. Trakia Journal of Sciences. 17, 511-523.
  33. Tapaninaho, R., & Heikkinen, A. (2022). Value creation in circular economy business for sustainability: A stakeholder relationship perspective. Business Strategy and the Environment, 31(6), 2728-2740.
  34.  Urbinati, A., Chiaroni, D., & Chiesa, V. (2017). Towards a new taxonomy of circular economy business models. Journal of Cleaner Production168, 487-498.
  35. Uvarova, I., Dzin, R.A., & Korpa, V. (2020). Challenges of the introduction of circular business models within rural SMEs of EU. International journal of Economic Sciences, 2128.
  36. Whalen, C.J., & Whalen, K. A. (2020). Circular economy business models: A critical examination. Journal of Economic Issues54(3), 628-643.
  37. Yavari, G., Hanafizadeh, P., & Haji Ahmadi Farmahini, T. (2016). Development of e-tourism business model based on social networks in Iran, master's thesis; Faculty of Management and Accounting; Allameh Tabatabai University (In persion).