Mapping circular economy principles and servitisation approach in business model canvas: an integrated literature review

Abstract

It is a common perception that circular economy (CE) principles positively influence the servitisation strategy. The firms improve their productivity and resource/energy efficiency by engineering functional efficacy in a sustainable product. However, the managerial practices that support this distinctive business model (BM) are relatively sparse despite their liaisons. Therefore, this paper is focused on addressing this gap by investigating the managerial practices that firms can implement to explore the downstream opportunities of CE and servitisation BM. This paper uses a systematic literature review (SLR) approach to frame a theoretical model. The findings were improved by cross-validation using a text mining technique, demonstrating how organisations may co-create and extract value through CE and servitisation to develop a flexible management system. This study used the business model canvas antecedents to map a set of managerial practices to understand the mythography of the servitisation approach with CE principles. The findings show that identifying key stakeholders assists a firm in selecting an appropriate strategy based on sustainable value propositions that include cost structure and revenue streams to close the resource loop. Managerial commitment is critical in achieving the maximum economic, environmental, and societal potential. A few research agendas with distinct research orientations are proposed to mitigate the significant research gaps in CE and servitisation literature. This study provides managers and practitioners with some intriguing insights as it emphasises the need to select a suitable strategy to utilise a firm's resources successfully.