Challenges Faced by Global Manufacturing Companies When Implementing Circular Economy Business Models
Kujanpää, Oskari (2023)
2023
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023120433878
https://urn.fi/URN:NBN:fi:amk-2023120433878
Tiivistelmä
This bachelor’s thesis discusses the challenges of circular economy business models in large, globally operating manufacturing companies. The primary goal of this study was to understand the challenges global manufacturing companies face when implementing circular economy business models in their businesses. Circular Economy is key in tackling the climate change and other issues born from the traditional linear economy business models. A transition towards the Circular Economy is inevitable, but as of today the process is still unclear for companies. There-fore, it is important to study more in-depth the challenges faced by companies in the transition progress.
This thesis consists of two sections, a literature review followed by an empirical study. The literature review presents and discusses the concepts of Circular Economy and its business models, its financial aspects, and the regulations based on the existing academic literature. An empirical study was conducted using a qualitative research method. Five in-depth interviews were conducted with professionals from five different large globally operating manufacturing companies. This empirical study aimed at gathering experiences, opinions, and feelings in today’s business setting. This allowed the author to compare the findings from the literature review with practical examples from today’s manufacturing companies.
The literature review supported the idea that transitioning towards Circular Economy is inevitable and that is it highly advantageous. The findings from the empirical study showed that as of today, there are many challenges regarding supply chain, regulations and the financial management, which are hindering the transition. There is no clear consensus on how companies should transition. Even though literature suggests that circular economy business models would allow companies to perform better financially and grow sustainably, at the times where costs and regulations are unclear for the companies, transitioning can be seen as a big risk from the companies’ perspective.
The results of the study shed light to the challenges companies are facing in the transition towards circular economy. To overcome these challenges, a change of mindset is needed with the help of investing resources towards research and innovation in the field of circular economy. Transitioning towards circular economy is of growing importance and continuous research on the topic is needed.
This thesis consists of two sections, a literature review followed by an empirical study. The literature review presents and discusses the concepts of Circular Economy and its business models, its financial aspects, and the regulations based on the existing academic literature. An empirical study was conducted using a qualitative research method. Five in-depth interviews were conducted with professionals from five different large globally operating manufacturing companies. This empirical study aimed at gathering experiences, opinions, and feelings in today’s business setting. This allowed the author to compare the findings from the literature review with practical examples from today’s manufacturing companies.
The literature review supported the idea that transitioning towards Circular Economy is inevitable and that is it highly advantageous. The findings from the empirical study showed that as of today, there are many challenges regarding supply chain, regulations and the financial management, which are hindering the transition. There is no clear consensus on how companies should transition. Even though literature suggests that circular economy business models would allow companies to perform better financially and grow sustainably, at the times where costs and regulations are unclear for the companies, transitioning can be seen as a big risk from the companies’ perspective.
The results of the study shed light to the challenges companies are facing in the transition towards circular economy. To overcome these challenges, a change of mindset is needed with the help of investing resources towards research and innovation in the field of circular economy. Transitioning towards circular economy is of growing importance and continuous research on the topic is needed.