All business models involve suppliers and customers. A linear business model focuses exclusively on these two sets of stakeholders. With this framework in mind, neither the origin of supplied materials nor the post-consumption waste of said materials is regarded. Thus, the nature of the linear business model is purely transactional. It does not aim to create value for stakeholders and businesses further down the value chain (i.e. recyclers, repair shops, collectors), nor does it consider the impact on the natural environment.
In terms of timeframe, linear business models generally aim to create value for a short period. Maintaining and restoring value over time are not priorities, meaning product/service value gradually and inevitably erodes for the customer. When customers no longer benefit, they discard the products, and because downstream economic value was never intended, no other business can use discarded products as feedstock, thus generating waste.
“But what if there was a business model that considered the value of a product through its entire lifecycle, from pre-production to post-consumption?” you may be asking yourself. Alas, there is! It’s called a Circular Business Model, and it’s not just a trend, but the future of the globalized economy. We’ve highlighted three principles of creating a circular business model, below.