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A conjoint analysis of circular economy value propositions for consumers: using “washing machines in Stockholm” as a case study
KTH, School of Industrial Engineering and Management (ITM), Production Engineering. (Manufacturing and Metrology Systems)ORCID iD: 0000-0002-5826-8670
KTH, School of Industrial Engineering and Management (ITM), Production Engineering. (Manufacturing and Metrology Systems)ORCID iD: 0000-0002-6590-7514
KTH, School of Industrial Engineering and Management (ITM), Production Engineering. (Manufacturing and Metrology Systems)ORCID iD: 0000-0002-5960-2159
Gorenje d.d.. (R&D Competence Centre Laundry Care)
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(English)In: Journal of Cleaner Production, ISSN 0959-6526, E-ISSN 1879-1786Article in journal (Refereed) Accepted
Abstract [en]

Background: In industrial practice a transition from a linear (take-make-dispose) to a circular product system (considering reuse/remanufacturing/recycling) requires the change of business models through new value propositions. In doing so the focus of the value proposition shifts from selling a physical product to providing access to functionality through business innovation. One key factor related to circular business transitions is market acceptance. It is particularly challenging to understand what complexity a new concept like circular economy (CE) brings to established businesses where the success and the failure of the business is dependent on customer's acceptance of new value propositions. Purpose: This paper empirically explores the opportunities of a circular business approach for washing machines in the city of Stockholm by quantifying and assessing customer preferences for CE value propositions for a business to customer (B2C) scenario. Method: This study uses the method of choice-based conjoint analysis to investigate preferences based on the attributes price and payment scheme, environmental friendliness as well as service level. Originality: This paper is the first of its kind to assess customer preferences from the CE market acceptance point of view using a conjoint approach and provides insight to what extent new CE value propositions may be adopted. Findings: Results indicate that there is general interest in paying for access rather than for ownership. Service levels have the strongest impact on customer utility of a washing machine offer. If associated with reduction in CO2 emissions the number of remanufacturing cycles can increase purchase probability. As a method choice-based conjoint analysis is highlighted as beneficial to break down CE value propositions and to identify to what extent particular service-related attributes and product-related attributes contribute to overall customer utility. (C) 2017 Elsevier Ltd. All rights reserved.

Keywords [en]
Circular Economy, Customer preferences, Customer acceptance, Business models, Conjoint analysis, Washing machines
National Category
Economics and Business
Identifiers
URN: urn:nbn:se:kth:diva-212988DOI: 10.1016/j.jclepro.2017.10.147ISI: 000423001900025Scopus ID: 2-s2.0-85038882786OAI: oai:DiVA.org:kth-212988DiVA, id: diva2:1136148
Note

QC 20170825

Available from: 2017-08-25 Created: 2017-08-25 Last updated: 2018-02-20Bibliographically approved
In thesis
1. From resource efficiency to resource conservation: Studies, developments and recommendations for industrial implementation of circular manufacturing systems
Open this publication in new window or tab >>From resource efficiency to resource conservation: Studies, developments and recommendations for industrial implementation of circular manufacturing systems
2017 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Manufacturing industry is under permanent pressure to maintain its economic growth and profitability as strong societal backbone. At the same time pressures of waste generation and resource consumption are increasing as result of manufacturing operations. Since manufacturing industry is one of the major consumers of natural resources it is therefore essential to reduce dependency on natural resources by decoupling economic growth from consumption. Resource efficiency approaches can improve the performance of production systems by reducing resource losses. However, the fundamental assumption at the basis of resource efficiency approaches is that resources are available infinitely. As a consequence, challenges of sustainability and resource scarcity remain inadequately addressed. The objective of this research is to develop analysis methods and decision support tools for manufacturing industry to facilitate its transition from linear production systems to circular manufacturing systems, which are economically viable and environmentally sustainable. The initial scope of study focuses on industrial resource efficiency assessment in production systems. Expanding the view to a manufacturing system perspective, the current research is explored with regard to circular manufacturing systems in the context of economic benefits, resource scarcity and waste generation. Systematic analysis methods and decision support tools are developed for industrial companies to facilitate the adaption of circular manufacturing systems. These developments are supported by industrial case studies. The analysis methods are to the largest extent based on agent-based simulation approaches. The tools are capable of assessing the economic and environmental impact of different business models, design strategies as well as supply chains settings. Moreover, the tools are able to determine whether introductions of new (circular) business models will be adopted by customers. One empirical market study is performed to investigate value propositions of a circular business approaches based on customer decisions.

Place, publisher, year, edition, pages
Stockholm: KTH Royal Institute of Technology, 2017. p. 97
Series
TRITA-IIP, ISSN 1650-1888 ; 17-08
Keywords
Circular economy, Circular manufacturing systems, Resource conservative manufacturing, ResCoM, Agent-based modelling, Multi-method modelling
National Category
Engineering and Technology
Research subject
Production Engineering
Identifiers
urn:nbn:se:kth:diva-212923 (URN)978-91-7729-489-4 (ISBN)
Public defence
2017-09-22, F3, Lindstedtsvägen 26, Stockholm, 10:00 (English)
Opponent
Supervisors
Funder
EU, FP7, Seventh Framework Programme
Note

QC 20170825

Available from: 2017-08-25 Created: 2017-08-24 Last updated: 2017-08-31Bibliographically approved

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Lieder, MichaelAbdullah Asif, Farazee MohammadRashid, Amir

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