Service Design Approach in Initiating a Business - Based on Circular Economy

Abstract

The aim of this thesis was to develop a business model based on the circular economy and service design approach. Production and consumption behaviors have become one of the main factors slowing down the possibility of achieving sustainability. Therefore, faster movement to a circular economy from the linear economy is essential for achieving sustainability. Among them, waste generation from textile-based manufacturing processes and consumer behaviors have significant negative impacts. The research was based on addressing this problem as a new business intends to enter the soft furnishing market. The study focused on enhancing product circularity by facilitating longer product-intended usage and continued utility even beyond that. Design thinking, the service designing approach, and its associated tools were utilized to empathize with customer preferences in finding solutions. Double Diamond design process grounded the research for coherent structure with two major sections Research and Design, including survey and online content analysis for research data gathering. Co-creation workshops were utilized for the ideating in the Design phase. The mix of tools fostered accuracy and enabled meaningful contributions to the business model development. As a result of the Discover phase the right problem, opportunities, and needs were identified. In the Define phase of the Design process, the research identified a core customer segment as environmental sustainability-focused consumers and its three sub-segments based on soft furnishing preferences. Based on the empathized needs of the potential customers, the unique value proposition was defined for the initial development of the business model. The Business Model Canvas was developed through collaborative ideation which is the outcome of the research. Criteria of the main products are identified as longer life span, eco-friendliest, and interchangeability while tack-back service is identified as the key service that fosters recycling, reselling, repurposing, repairing, and renting. The initial Business Model Canvas was refined through the iterative process, of testing, refining, and improving. The revised version of the Business Model Canvas can be utilized for the implementation of the startup.