The complexity of circular business models and the effect of firm size in the clothing industry - A variable development and quantitative study for the clothing industry

Abstract

With the newly added focus on the social and environmental costs associated with the fast fashion and clothing industry, many researchers have attempted to solve the problem and come up with valid theories for change. A way to minimize externalities is with the implementation of circular business models, which have become increasingly relevant to prolong the life cycle of products, reduce the use of natural resources and minimize harmful emissions and can, therefore, be a possible solution to the problem. However, there are many different interpretations of the model, and there is no general consensus that can be applied regardless of industry. Instead, it appears that customization is necessary to fully capture the possible benefits. This thesis attempt to address this gap and provide clarity to the subject by conducting an extensive literature study review in order to investigate prominent research in the field of circular business models and present their similarities and differences regarding the distinct benefits, problems and opportunities of the model. Based on the result of the literature study, three variables are developed to show how a quantitative analysis can be made with a focus on a single industry. This was made as little research has been done regarding the correlation of (clothing) firm-size and the willingness to implement circular business models. The result of the thesis indicated that, while the implementation of circular business models appears to somewhat correlate with firm size, more research is needed to better understand the full extent of the potential benefits and problems. Furthermore, as customization of circular business models appears to be a requisite for implementation due to differences between industries, a general consensus could, therefore, facilitate the development of such personalized models and enable the transition throughout the economy.