Servitization business under circular economy : optimizing cash flow and working capital management in manufacturing industry

Abstract

The transition from linear to circular economy models has become increasingly crucial for manufacturing companies, driving the adoption of servitization business models.

This thesis investigated the financial implications of this transformation with focuses on the changes in cash flow and working capital and provided insights into the opportunities and challenges associated with transforming to servitization business models.

By employing qualitative methods, including interviews and analysis of secondary data, research indicated that servitization can lead to both positive and negative financial outcomes, which are influenced by the type of servitization models implemented. The findings revealed varying impacts on cash flow and working capital, and opportunities and challenges during the transition process. Successful transformation requires comprehensive strategic planning, adaptability, and comprehensive approach to integrate into existing business frameworks.