CIRCULAR ECONOMY ADVANTAGE

Business Models for a Resource Constrained World

Key Elements to Remember

5 CIRCULAR

BUSINESS MODELS

3 DRIVING FORCES

FOR CIRCULAR

4 WASTES IN A

LINEAR ECONOMY

3 Drivers for Circularity

RESOURCE

SQUEEZECUSTOMER

CENTRICITY

TECHNOLOGY

DEVELOPMENT

Society needs

circularity

Innovation enables

new efficiencies

Consumption models

are changing

Circularity = Customer Centricity + Sustainability + Technology

Circular

TechnologyRemoves current

barriers

Customer centricityDelivers customer outcomes

SustainabilityImproves resource

utilization

Right purpose

Right efficiency

Rightdelivery

Germany

Res

ou

rce

us

e

Economic development

1

10

100

10,000 100,0001,000100

tons/

capita

India

China

The Linear Growth Model

!

Norway

Bangladesh

1

10

100

GDP/capita

Germany

Res

ou

rce

us

e

Economic development

1

10

100

10,000 100,0001,000100

tons/

capita

India

China

Norway

Bangladesh

10

GDP/capita1

100

RESORCE PRODUCTIVITY

IMPROVEMENT NEEDED

BY 2050: 4X

The Linear Growth Model

7

Enabling Technologies

Social

Mobile

M2M

Communication

Cloud

Analytics

3D Printing

Advanced

recycling tech

Trace and return

systems

Modular design

technology

Life & Material

sciences

Enabling entirely new ways to access and

understand product use-phase and aid

customers in use efficiency

Digital

Enabling moving physical objects back and

forth from value chains with digital services

to drive down cost

Hybrid

Enabling production and supply of new types

of resources as well as new product designs

to use them

Engineering

Transformation of the 4Ps of Marketing

PRODUCTEXPERIENCE

VALUE FOR MONEY

PEACE OF MIND

SENSE OF RESPONSIBILITY

CONVENIENCE

PRODUCT PRICE PLACE PROMOTION

”WHAT CAN I SELL IT FOR?”

”IT CAN STILL BE USED”

”THEY NOW WHAT TO DO”

”MY OLD ONE NEED TO GO”

”I CAN ACCESS THE LATEST”

”2ND HAND IS SO WORTH IT”

”FEELS GOOD TO RECYCLE”

”I DO NOT MIND SHARING”

”NOT OWNING STUFF SAVE TIME”

“NEW STUFF LASTS

LONGER”

“OTHERS WILL BREAK MY

HOUSE”

“NOT MY FAULT NOT MY

PROBLEM”

“OWNING GIVE ME

FLEXIBILITY”

“I WANT IT TO BE FULLY ADAPTED

TO ME”

”I CAN ACCESS THE LATEST”

Diverse Consumer Base

WASTED EMBEDDED VALUES

Logistics

Marketing& sales

Product

use

End of lifedisposal

Reverselogistics

Sourcing

Manufacturing

4 Types of Linear Wastes

WASTED RESOURCES WASTED CAPACITY

WASTED LIFECYCLES

Logistics

Marketing& sales

Product

use

End of lifedisposal

Reverselogistics

Sourcing

Manufacturing

MONETIZE WASTED CAPACITY

PREVENT WASTED LIFECYCLES

5 Business Models for Circular Advantage

RECOVER EMBEDDED VALUES

Circular Supply

Chain

REPLACE WASTED RESOURCES

advantage

BIOBASED - BIODEGRADABLERECYCLABLERENEWABLE ENERGY

MONETIZE WASTED CAPACITY

PREVENT WASTED LIFECYCLES

Logistics

Marketing& sales

Product use

End of lifedisposal

Reverselogistics

Sourcing

Manufacturing

Circular Supply

Chain Sharing Platform

RECOVER EMBEDDED VALUES

5 Business Models for Circular Advantage

SHARING PLATFORM SHARED PRODUCTSHARED USE

PREVENT WASTED LIFECYCLES

Logistics

Marketing& sales

Product use

End of lifedisposal

Reverselogistics

Sourcing

Manufacturing

Circular

Supply Chain Sharing

Platform

Product Life

ExtensionRECOVER EMBEDDED VALUES

5 Business Models for Circular Advantage

advantage

RESELL REPAIRUPGRADE

Recovery &

Recycling

RECOVER EMBEDDED VALUES

Logistics

Marketing& sales

Product

us

End of lifedisposal

Reverselogistics

Sourcing

Manufacturing

Circular

Supply Chain Sharing

Platform

Product Life

Extension

5 Business Models for Circular Advantage

18

PRE-CONSUMER RECOVERY INDUSTRIAL SYMBIOSIS POST-CONSUMER RECOVERY

Recovery & Recycling

Logistics

Marketing& sales

Product

us

End of lifedisposal

Reverselogistics

Sourcing

Manufacturing

Circular Supply Chain

Product as a Service

Product Life Extension

Sharing Platform

5 Business Models for Circular Advantage

SUBSCRIPTION PAY FOR UTILITYPAY FOR USAGE

Logistics

Marketing& sales

Product

us

End of lifedisposal

Reverselogistics

Sourcing

Manufacturing

Recovery & Recycling

Circular Supply Chain

Product as a Service

Product Life Extension

Sharing Platform

5 Business Models for Circular Advantage

Circular Value Creation Logic

The ‘Karlstad’ sofa example

LINEAR SETUP

IKEA revenue

Product age

New sale

$900

1st life

CIRCULAR ADVANTAGE SETUP

IKEA potential revenue

Product age

1st

life

2nd

life

3rd

life

4th

lifeEnd

of life

New sale

$900Second sale

$300New slipcover

$180Refurbish service

$100Recycling

$10

+65%

= $1.490

= $ 900

CUSTOMER VALUE FOR MONEY

MORE CUSTOMER INTERACTION

REDUCED FOOTPRINT

LOWER RISK

Copyright © 2017 Accenture All rights reserved. 23

It’s A Journey.

• Common Notion & Thinking

• Current Success & Heroes

• Internal Structures

• New Products & Services

• New Core Capabilities

• New ways of working &

governing

• All products & services

• All capabilities

• All ways of working &

governing

Copyright © 2017 Accenture All rights reserved. 24

Barriers do exists within companies

CircularPilots

Circular Company

Circular

EcosystemECOSYSTEM

ADOPTION

REGULATION

BUSINESS CASE

SILO STRUCTURES

LEGACY

IMMUNE SYSTEM

RECYCLING FOCUS

TECHNOLOGY

What’s Taking So Long?

DESIGN LOGISTICS FINANCE LEGALITY

Key Elements to Remember

5 CIRCULAR

BUSINESS MODELS

3 DRIVING FORCES

FOR CIRCULAR

4 WASTES IN A

LINEAR ECONOMY