Page 15 - Environmental_Circular Economy

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2.2.2 Canvas Circular Businees Model

The Spanish Sustain Enterprise has proposed a methodology to use the Canvas Business Model Generation
tool to create Circular business models. We will review here how they propose to fill in the different cells
of the Canvas model and the different step that one should follow to develop a circular model. (We are
Sustainn, s.f.)

Step 1: Proposed Definition of Value Propositions

You should start with defining the Value Proposition (PV) for the main client oriented to “Product as
a Service” models (based on use or result), following predefined keys based on the principles of Circular
Economy.

Step 2: Market Segments & Income Sources

Once the PV is defined, you should delimit the specific market segment and estimate the main customer’s
revenue sources in the complete circular business model, considering revenue models based on
pay-per-use or pay-per-result. Customer Relations and Channels are designed to ensure the quality of the
service, with special attention to user experience, usage patterns and reverse logistics.

Step 3: Key Activities and Associations & Cost Structure

Next, you should focus on identifying the Key Activities, paying special attention to the areas that most
affect the Quality, Cost and Term of the service. Regarding the Key Associations, the following concepts are
considered, taking into account the complete framework of the Circular Business Model:
- Nutrient Management Strategy, where product, component, material and waste flows are analyzed.
- Hierarchy of Circularity Criterion (Repair-Reuse-Renewal-Remanufacturing-Recycling). All potential for
material recirculation and waste recovery are analyzed, either internally (repair or internal waste recovery)
or with the collaboration of external stakeholders (renovation, downcycling, recycling, etc.).

Then, the Key Resources are specified, setting out the cost structure with the most relevant items of the
LCC (Life Cycle Cost).

Step 4: Identification of Additional Value Proposals

In this step, additional value propositions are identified among the different interest groups within the
complete framework of the Circular Business Model, which derive from any potential recirculation. It is
important to highlight that this step must be carried out collaboratively, integrating the knowledge and
experience of different stakeholders (multi-stakeholder approach).

Step 5: Specific Canvas for Additional Value Proposals

Then, a specific Circularity Canvas is developed to detail additional value propositions, with the same
approach used for the entire Circular Business Model framework (fractal approach).
The profitability of the Circular Business Model depends on the correct integration and synchronization of
these additional value propositions, which affects the cost of the service and the income flows.