BMT 8: CIRCULAR BUSINESS MODELS
TRADITIONAL VS CIRCULAR BUSINESS MODELS – IB BUSINESS NOTES
GLOBAL CONTEXT
• World population reached 8 billion in 2022, projected to be 9 billion by 2030 (UN/World Bank).
• Rising population and higher average incomes → increased demand for goods and services →
both opportunities and challenges for businesses.
1. TRADITIONAL (LINEAR) BUSINESS MODELS
• Focus on costs, revenues, and profits, usually with a short-term perspective.
• Follow a linear process: produce → consume → throw away.
Key features:
• Creates a disposable society.
• Overconsumption and waste generation are high.
Examples of disposable products:
• Soft drink cans
• Hotel amenities (toothbrushes, shower caps, razors)
• Fast food packaging
Planned Obsolescence:
• Products are designed with a short life span to encourage replacement.
• Examples: laptops, washing machines, home appliances, food “best before” dates.
• Financially efficient for businesses, but worsens environmental problems.
Problems:
• Overuse of natural and non-renewable resources
• Waste generation
• Contribution to climate change and ecosystem damage
2. CIRCULAR BUSINESS MODELS (CBM)
• Focus on long-term sustainability, reducing environmental harm, and reusing resources.
• Aim to turn waste into valuable inputs for new products.
Key idea:
• Balance profitability (business) with people and planet.
Strategies:
TRADITIONAL VS CIRCULAR BUSINESS MODELS – IB BUSINESS NOTES
GLOBAL CONTEXT
• World population reached 8 billion in 2022, projected to be 9 billion by 2030 (UN/World Bank).
• Rising population and higher average incomes → increased demand for goods and services →
both opportunities and challenges for businesses.
1. TRADITIONAL (LINEAR) BUSINESS MODELS
• Focus on costs, revenues, and profits, usually with a short-term perspective.
• Follow a linear process: produce → consume → throw away.
Key features:
• Creates a disposable society.
• Overconsumption and waste generation are high.
Examples of disposable products:
• Soft drink cans
• Hotel amenities (toothbrushes, shower caps, razors)
• Fast food packaging
Planned Obsolescence:
• Products are designed with a short life span to encourage replacement.
• Examples: laptops, washing machines, home appliances, food “best before” dates.
• Financially efficient for businesses, but worsens environmental problems.
Problems:
• Overuse of natural and non-renewable resources
• Waste generation
• Contribution to climate change and ecosystem damage
2. CIRCULAR BUSINESS MODELS (CBM)
• Focus on long-term sustainability, reducing environmental harm, and reusing resources.
• Aim to turn waste into valuable inputs for new products.
Key idea:
• Balance profitability (business) with people and planet.
Strategies:
