4. Business strategy implementation The following section describes the results from the first sub-study. First the propositions developed from the literature review are presented, followed by the results from the online surveys.
4.1 Challenges 4.1.1 Industry-level challenges Customer perspective Considering the customers’ attitude in transitioning towards new business models, more specifically remanufacturing practice is critical (Hazen et al. 2017), as it has been challenging to observe (Gurita et al. 2018). Furthermore, it has been described that without motivation, customers are not interested in more sustainable options (Veleva and Bodkin 2018). – P1: Consumer attitudes and preferences are challenging when working with remanufactured products. Political perspective Large companies have been described to have a lack of interest or motivation for implementing or scaling up circular activities, such as reuse, remanufacturing or upcycling (Veleva and Bodkin 2018). With a lack of policy incentives, such as tax reductions product standards (Vogtlander et al. 2017), companies’ interest in transitioning towards circularity can be inhibited (Singh and Ordoñez 2016). – P2: The lack of policies, standards and guidelines inhibits the implementation of remanufacturing activities.
4.1.2 System-level challenges Business model perspective Designing circular revenue models becomes more complicated, as it is necessary to not only predict initial sales, but also circulation of the offering, when comparing to linear business models where the costs are only predicted once (Linder and Williander 2017). Thus, costs that occur later in the product’s lifetime are necessary to account for, such as additional materials for remanufacturing, stock of materials, etc. (Linder and Williander 2017). As companies don’t yet have a sufficient understanding of the market, more investigation is necessary by including other stakeholders, such as the customers in order to reach a suitable revenue model (Jensen et al. 2019). – P3: Visualising the economic value created through remanufacturing is more challenging as the revenue models become more complex. Marketing strategy perspective A lack of customer demand and awareness for sustainable products (Veleva and Bodkin 2018), along with limited sales arguments including sustainability for remanufactured products (Vogtlander et al. 2017), has led to concerns relating to weak and uncompetitive selling approaches for such goods (Kurilova-Palisaitiene et al. 2018). – P4: Fluctuation of consumer demand and awareness for sustainable products makes it challenging to market remanufactured products.
14
Remanufacturing of deadstock and customer claims apparel
