SWOT circular model
SWOT of circularity for organisations New revenue opportunities Disruptive & radical change System optimization System redesign/innovation Readiness for inevitable change Build organizational & personnel competencies Engage in future-proof networks/supply chains Engage in future-proof networks/supply chains Increased Tender requirements Damage to organizational image Supply risk of resources Price increase of resources Increased governmental intervention Legitimacy for end-users & stakeholders Impact transparency by reviews, NGOs etc. Circular procurement (government, b2b, consumers) Multiple value creatie Collaborative consumption Open innovation & co-creation of value propositions Post-consumerism funding & financing Complexity of organization and management Network/supply chain interdependency issues Internal & network information need End-user emotional attachment & intangible values Transaction costs (in non-standardized supply chains) Risk premium (in non-standardized supply chains) Competitive advantage of linear models Abundance of (some) cheap raw materials Substitutes for scarce materials Lacking awareness & urgency in society and business Short term horizon of (some) shareholders Required system transition Up-front investment costs Long(er) time horizon of revenue generation Mis-interpretation of circular principles

SWOT of circularity for organisations

Strengths and opportunities of the circular economy for organizations. Weaknesses and threats are related to the remaining strengths and opportunities of the current linear economy.

New revenue opportunities

New needs in supply chains or for end-users can generate new sales & profit

Disruptive & radical change

Strategic increases in resource efficiency, decreases in cost prices, substitute products & service etc.

System optimization

Additional value is created in the supply chain through efficiency or new additional values

System redesign/innovation

New markets can be entered or created by new processes or collaborations by radical changes in the way value is created

Readiness for inevitable change

Initiating or being at the forefront of change is the best way of managing inevitable change

Build organizational & personnel competencies

Overcoming the challenges of circular innovation in an early stage creates competencies crucial in the nearby future

Engage in future-proof networks/supply chains

New supply chain and network partners are needed for maintaining competitive relevance

Engage in future-proof networks/supply chains

New supply chain and network partners are needed for maintaining competitive relevance

Increased Tender requirements

Governments, businesses and consumers will make circularity a boundary condition for suppliers

Damage to organizational image

Demonstrating no apparent progress in circularity could damage corporate & government image

Supply risk of resources

Resource depletion, absolute scarcity, geopolitics and political instability are the main driver for circularity

Price increase of resources

Linked to the supply risk and the interconnectedness of resources and scarcity price volatility & increases occur

Increased governmental intervention

Environmental regulations and legislation put on production & supply chain processes are expected to grow

Legitimacy for end-users & stakeholders

Concerns about production methods,  mitigation of environmental and social harm and social responsibility of companies influence decisions on their purchases

 

Impact transparency by reviews, NGOs etc.

Availability of information by labels, quality marks, transparency of production processes, reporting and public activities of NGOs make for informed end-users

Circular procurement (government, b2b, consumers)

Front running companies, launching customers and progressive governments are regearing their procurement towards circularity

Multiple value creatie

Social, ecological, shared values are becoming more important as an addition to the purely material and economical values

Collaborative consumption

The growing trend of sharing products to reduce total cost of ownership, increase utility and reduce waste for all end-users

Open innovation & co-creation of value propositions

Customers, end-users and peer organizations become partners in a shared innovation approach leveraging impact and reducing time-to-market and costs

Post-consumerism funding & financing

Although investment money seems abundant, truly attractive funding will increasingly require demonstrable circularity (progress)

Complexity of organization and management

More stakeholders require more organizational activity, structures and routines and more information needs to be generated, exchanged and processed

Network/supply chain interdependency issues

Closer collaboration increases the dependency of partners on each other often thought to be diminished/controlled (trust, joined benefits, dependency, confidentiality etc.)

Internal & network information need

New & additional information is needed on materials, components, products and production, distribution & recycling processes

End-user emotional attachment & intangible values

When there are emotions or intangible/priceless values attached to a product renting, leasing or other collaborative use is difficult

Transaction costs (in non-standardized supply chains)

Controlling collaboration in contracts or via collectively developed coordination systems can increase transaction costs if there is no common ground to work with

Risk premium (in non-standardized supply chains)

If the interdepency is high and the perceived trust and performance transparency low partners might add risk premiums in their cost pricing

Competitive advantage of linear models

Sticking to an existing business model and keeping all focus on its profitability van create competitive advantage in the short term

Abundance of (some) cheap raw materials

Although many materials will become scarce in the short term specific sources or political reasons could maintain a low cost abundance

Substitutes for scarce materials

The economical urgency for circularity might decrease if the concerned raw materials are replaced by (short term) abundant substitute resources

Lacking awareness & urgency in society and business

Knowledge, motivation and incentives for multiple value consumption are still relatively low

Short term horizon of (some) shareholders

Shareholders with a short-term (financial) agenda still seem to dominate corporate governance

Required system transition

Financial, organizational, institutional, technological and societal aspects of our current sociotechnical system benefit a linear model

Up-front investment costs

Changing to a service model initially needs more investments than a model with one early transaction

Long(er) time horizon of revenue generation

Due to the spread of income larger capital reserves are necessary

Mis-interpretation of circular principles

Circularity is used in various definitions and mis-alignment of the process and benefits can cause problems and mistrust between stakeholders