In search of sustainability gains from the complementarity between value creation, value proposition and value capture elements of circular business models

Levänen, Jarkko; Ranta, Valtteri; Patala, Samuli Article In search of sustainability gains from the complementarity between value creation, value proposition and value capture elements of circular business models Journal of Business Models (JOBM) Provided in Cooperation with: Aalborg University, Aalborg Suggested Citation: Levänen, Jarkko; Ranta, Valtteri; Patala, Samuli (2024) : In search of sustainability gains from the complementarity between value creation, value proposition and value capture elements of circular business models, Journal of Business Models (JOBM), ISSN 2246-2465, Aalborg University Open Publishing, Aalborg, Vol. 12, Iss. 2, pp. 1-24, https://doi.org/10.54337/jbm.v12i2.8841 This Version is available at: https://hdl.handle.net/10419/319030 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/3.0/ 1 Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 In Search of Sustainability Gains from the Complementarity Between Value Creation, Value Proposition and Value Capture Elements of Circular Business Models Jarkko Levänen1, Valtteri Ranta2, Samuli Patala2 Abstract Purpose: Functioning of business models that follow the philosophy of circular economy is a growing research theme but discussion about the potential and the limitations of such business models remains unstructured. We provide a focused perspective on the meaning of complementarity between the elements of business models. Approach: Cluster analysis techniques allow us to explicate correlations between the business model elements, which in turn enables us to demonstrate how complementarity between these elements can strengthen the creation of both societal and customer value. Findings: By analyzing 92 companies, we point out why complementarity between the value creation, value proposition and value capture elements is an important phenomenon. We also show how complementarity can be utilized in the development of circular business models. Social and practical implications: Our findings are promising because numerous societal and customer value propositions seem to be compatible with diverse business model elements. This means that circular features can be attached to various types of business. Based on our analysis, we propose that business model complementarity should be thoroughly considered in the future efforts to develop more ambitious circular business models. Keywords: business model; circular economy; sustainability; value capture; value creation; value proposition Please cite this paper as: Levänen, J., Ranta, V., and Patala, S. (2023b), In Search of Sustainability Gains from the Complementarity Between Value Creation, Value Proposition and Value Capture Elements of Circular Business Models, Vol. 11, No. 5, pp. 1-24 1 Department of Sustainability Science, LUT University, Finland. Corresponding author. Address: Mukkulankatu 19, 15210 Lahti, Finland; email jarkko.lev[email protected], tel. +358 50472 5686. 2 Faculty of Management and Business, Tampere University, Finland; email valtt[email protected] 3 Department of Management Studies, Aalto University, Finland; email [email protected] Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 2 2 Introduction The circular economy has been identified as a pathway towards reducing the overexploitation of natural resources and the concept has received increased interest within research (Türkeli, Kemp, Huang, Bleischwitz and McDowall, 2018), policymaking (McDowall, Geng, Huang, Bartekova, Bleischwiz and Turkeli, 2017), and business (Murray, Skene and Haynes, 2017) communities across the globe. At its core, the circular economy is a system designed to be restorative with an aim to replace the “end-of-life” concept with the continuous circulation of products and materials (Ellen MacArthur Foundation, 2017; Geissdoerfer, Savaget, Bocken and Hultink, 2017; Kalmykova, Sadagopan and Rosado, 2018). In European Union, for example, circular economy action plan is a key part of Green Deal program that aims to decouple economic growth and resource use while simultaneously achieving net-zero greenhouse gas emissions by 2050. Currently only a small part of the total consumption and production can be considered truly circular (Guzzo, Pigosso, Vidiera and Mascarenhas 2022; de Wit, Verstraeten-Jochemsen, Hoogzaad and Kubbinga, 2019). Business model approach (Zott and Amit, 2010) has gained attention as a theoretical perspective on the capacity of businesses to advance circular economy (Centobelli, Cerchione, Chiaroni, Del Vecchio and Urbinati, 2020; Linder and Williander, 2015; Merli, Preziosi, and Acampora, 2018). Discussion about circular business models is a part of wider effort to understand how sustainability-related goals can be integrated into business activities (Bocken, Short, Rana and Evans, 2014; Bocken, de Pauw, Bakker, and van der Grinten, 2016; Evans, Vladimirova, Holgado, van Fossen, Yang, Silva and Barlow, 2017; Stubbs and Cocklin, 2008). Research on circular business models aims to explain how societal value – in forms of wellbeing of humans and the nature (Bocken et al., 2016; Porter and Kramer, 2011) – can be produced in addition to typically considered customer value – in form of a benefit that customer gets from buying a product or service (Anderson, Narus and van Rossum, 2006; Payne, Frow and Eggert, 2017). While research in this area is growing fast (see e.g. Bocken and Ritala, 2021; Ferasso, Beliaeva, Kraus, Clauss and Ribeiro-Soriano 2020; Valve, Lazarevica and Humalisto, 2021), still little is known about how to combine different types of circular value creation in different situations and operational areas (Laasch, 2018; Lüdeke-Freund, Rauter, Pedersen and Nielsen, 2020; Ranta, Aarikka-Stenroos and Mäkinen, 2018a). Also concerns have been raised regarding the sustainability aspects of circular business models (e.g. Figge and Thorpe, 2019; Stewart and Niero, 2018; Zink and Geyer, 2017). For example, it has been argued that in many cases development of circular business activities overly focuses on the business benefits achieved only through customer value creation (Hofmann, 2019). While the notions about the limitations of circular economy business models (Kirchherr, Reike and Hekkert, 2017; Korhonen, Honkasalo and Seppälä, 2018) are often well justified, criticism has in many cases been unstructured and remained at a general level. For example, it is known that different companies face different challenges in the implementation of circular activities into their business models (Rizos, Behrens, van der Gaast, Hofman, Ioannou, Kafyeke, Flamos, Rinaldi, Papadelis, Hirschnitz-Garbers and Topi, 2016; García-Quevedo, Jove-Llopis and Martínez-Ros, 2020) and in some situations these implementations can have united or unexpected consequences (Di Fabio, 2020; McLaughlin and Börger, 2019). These types of aspects remain often unnoticed in generallevel criticisms. Generality of critical discussions is problematic from the perspective of development of more ambitious circular business models. To facilitate a more focused discussion, we need better understanding about the exact functioning and impacts of circular business models (Levänen, Uusitalo, Härri, Kareinen and Linnanen, 2021). Gaining such understanding, however, is challenging because business activities take place in complex socio-ecological systems and their implications do not realize only in one value dimension (Fehrer and Wieland, 2021). To navigate this complexity, it is important to learn to analyze how different elements of business models interact and how they can strengthen or weaken each other in terms of sustainable value creation. While the extant research has identified different types of circular business models (Lewandowski, 2016; Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 3 3 Lüdeke-Freund, Gold and Bocken, 2019; Urbinati et al., 2017), the complementarity between the business model elements is much less studied area. This article shows how complementarity between the business model elements can be studied empirically. We demonstrate how different configurations of co-functional business model elements can facilitate positive sustainability-related outcomes in different situations without losing the feasibility of the business. To operationalize our research, we pose the following questions: 1) what types of value creation elements do firms highlight in their circular business models? 2) what types of value creation and value proposition elements are complementary with each other? and 3) what types of value creation and value capture elements are complementary with each other? We use cluster analysis techniques to answer these questions. Analysis of 92 companies allows us to explicate correlations between value creation, value proposition and value capture elements of circular business models. By means of identified correlations, we explain why complementarity between the business model elements is important and how it can be utilized in the further development of circular business models. This article is structured as follows. In section 2, we explain the conceptual basis of the business model complementarity phenomenon. After that, in section 3, we provide information about the materials and methods of this study. In section 4, we present identified linkages between the studied business model elements. Finally, in section 5, we discuss our findings and present key conclusions from this research. Business model complementarity Emerging from the strategic management field, the business model approach (Zott and Amit, 2010) aims to capture the holistic nature of business, reflecting “stories that explain how enterprises work” (Magretta, 2002: 4) and how firms create value (Teece, 2010). This approach has turned out useful in research on how firms can facilitate business aligned with circular economy principles (Lüdeke-Freund et al., 2019; Nußholz, 2018; Rizos et al., 2016). The implementation of circular features typically requires significant changes in business conduct (Bocken, Thijs and Geradts, 2020; Levänen, Park and Rosca, 2022) and business model concept helps to understand how these features can be attached to specific business activities (Geissdoerfer, Pieroni, Pigosso and Soufani, 2020; Ranta, Aarikka-Stenroos, Ritala and Mäkinen, 2018b). A common way to conceptualize business model is to present it as a combination of value proposition, value creation, and value capture elements. Value proposition forms the core of the business model (Teece, 2010) and represents what the firm considers to be valuable, i.e., the proposed value, in their offering(s) (Payne et al., 2017). The value proposition describes the type of value being proposed, which is typically analyzed through a lens of value dimensions (Patala, Jalkala, Keränen, Väisänen, Tuominen, Soukka, Jalkala, Keränen, Väisänen, Tuominen, Soukka,.,., 2016; Rintamäki, Kuusela and Mitronen, 2007), such as customer value and societal value (Baldassarre, Calabretta, Bocken and Jaskiewicz, 2017; Boons and Lüdeke-Freund, 2013). Value creation describes how the value proposition is fulfilled (Zott, Amir and Massa, 2011). It includes the activities that the firm undertakes throughout its business activities to “create, produce, sell, and deliver their offering to customers” (Richardson, 2008: 139). In this article, we focus specifically on activities that are aligned with circular economy principles, following the strategies of slowing, closing and narrowing resource loops (Bocken et al., 2016). Finally, value capture describes the economic incentive for the firm to perform the business model, highlighting how revenue is generated in a profitable manner (Johnson, Christensen and Kagermann, 2008). In conceptual terms, this article focuses on business model complementarity. Complementarity has conceptual roots in the field of physics, and since that it has been applied especially in economics, but growingly also in business and management studies (Turner, 2022). In these fields, business model complementarity is mainly discussed as a business benefit gained through successful formulation of activities inside a specific business model element (Teece, Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 4 4 2018), between different business models (Burgelman, Snihur and Thomas, 2022; Snihur, Thomas and Burgelman, 2022) or within a network of multiple actors (Aarikka-Stenroos and Ritala, 2017; Xu, Kemppainen, Ahokangas and Pikkarainen, 2020). Complementarity has also been seen as a possible outcome of collaborative efforts around innovation development (Ballot, Kemppainen, Ahokangas and Pikkarainen, 2015). An approach where complementarity is understood as an interplay between the business model elements (Ritter and Lettl, 2018) has gained less attention than other above-mentioned perspectives on complementarity. In this article, we make a point that assessment of the complementarity across value proposition, value creation and value capture elements should be considered as a very important part in the analysis and development of circular business models. For example, certain value capture elements may enable utilization of certain value creation elements and thus determine the viability of the entire business model. By directing analytical focus into the interaction between the business model elements, we can learn how different types of elements can support each other in different fields, contexts, and situations (Levänen, Lyytinen and Gatica, 2018). Materials and methods We utilized a mixed methods approach combining qualitative and quantitative content analyses of selected firms’ business models. Selected companies have been pro-active in the integration of circular features into their business models. Studied companies have been accepted to the “List of most interesting companies in circular economy”, which is a program organized by the Finnish innovation fund Sitra – the major facilitator of the circular economy in Finland (see Arponen, Granskog, Pantsar, Stuchtey, Törmänen, Vanthournout, 2015). Data We utilized a database of 92 firms engaging in diverse circular activities. The data is based on interviews of firm representatives by Sitra’s personnel during their circular economy facilitation activities during the period from 2016 to 2019. Based on the interviews, the team compiled descriptions of each company’s business model and its connections to the principles of circular economy. The business model descriptions made by Sitra include a fact sheet about the company and information about the sustainability problem the firm attempts to mitigate. These documents also include relatively detailed information about the firm’s solution (value creation element), the firm’s revenue model (value capture element), and the benefits for their customers and the society at large (value proposition element). Basic information about the firms whose business models we studied is presented as Appendix A, and in the forthcoming sections we refer to specific firms with their real names. While the studied business model descriptions are static in nature and allow for less depth than deeper case studies with multiple informants per case, the advantage of using this type of dataset is that it enables a relatively broad comparative study. Methodology Our data analysis process was comprised of five distinct steps. Firstly, we chose a random sample of the cases (n=30) that was analyzed separately by all three authors. Qualitative coding was performed to the descriptions of the studied business models, linking portions of text to different business model elements. The NVivo 10 software was utilized for the analysis. In this stage, we used key business model elements identified in the literature (value creation, value capture and value proposition for both customers and society) as first-level codes. Within these categories, open-ended, emergent coding was performed, identifying sub-categories under each business model element as second-level codes. In the case of value creation, analysis also included identification of third-level codes. This initial coding process can be described as abductive in nature (Dubois and Gadde, 2002). In the second stage, the coding frames generated by the three authors were compared and analyzed for similarities and differences. At this stage, each code that was not present in all three coding schemes at any level was discussed separately. Codes that could be merged due to strong similarity were also identified. Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 5 5 In the third stage, the remainder of the cases (n=62) was coded by splitting the sample between the three authors. In this stage, the agreed upon coding scheme was utilized deductively. Two additional second-level codes emerged during this stage, which were then shared among the three researchers so that instances of the code could also be analyzed in all three samples. This stage was concluded by compiling all the codings under a single NVivo project. In the fourth stage, NVivo’s quantitative analysis tools were used to perform a cluster analysis on the coded cases. Codes were clustered according to the number of their co-occurrences across the cases (n=92). Each occurrence was represented by the presence of a particular coding within a single case rather than the length of coded text. This normalizes for the length of codings, as there was some heterogeneity in the descriptions and their relative emphasis on the different business mode elements. The Sorensen-Dice co-efficient was used as the basis for the cluster analysis, which is a commonly employed measure for analyzing the similarity of datasets in a lexical analysis (Manning and Schütze, 1999). It is calculated by dividing the number of shared occurrences in two datasets multiplied by two and divided by the total number of occurrences. This analysis provided a matrix of correlation scores between each code. Based on this, the most frequently cooccurring business model elements were identified and ranked based on the Sorensen-Dice co-efficient between them. Finally, in the fifth stage, based on the most distinct co-occurrences of circular business model elements, the case descriptions were reviewed to identify illustrative cases for each co-occurrence. The configurations were grouped based on the main value creation type (second-level code), and the most commonly occurring other business model elements (value capture and customer/societal value proposition) are listed with each value creation type. Many of the studied business models combined different ways of circular value creation, and therefore, we also identified major co-occurring value creation types. Results In this section we describe our findings concerning the complementarity between the business model elements. Table 1 summarizes the circular business model elements that we have identified. Below we anlyze the dynamics between these elements. Identified value creation elements We begin by answering to our first research question: what types of value creation elements do firms highlight in their circular business models? Five second-level codes of circular economy-related value creation elements occurring in the cases were identified: 1) asset or resource optimization, 2) product as a service, 3) replacement, 4) selling used products, and 5) waste to value. This division of value creation elements represents a typology rather than a taxonomy because many cases combined multiple types of activities. In Figure 1 we illustrate identified value creation elements and their sub-categories, which were identified as third-level codes. The asset or resource optimization consists of three sub-categories. In many cases, optimization of an asset or a resource was facilitated through an asset sharing marketplace, where the firm gave customers an opportunity to share their underutilized resources with peers, facilitating the optimization of value creation potential of an asset for customers. In consultation or installation services, the firms rely on their expertise of specific customer processes and provide customers with services that help them to optimize the inputs and outputs of a certain customer process or need. These often coincided with smart monitoring services, which enable customers or the studied firms to make data-driven decisions about the processes. The product as a service consists of two sub-categories that revolve around turning the exchange of a product into a service-like experience, namely longterm services and short-term rentals. In long-term services, customers acquire products that they consistently use as a service and in practice outsource the handling of the product to the supplier while always maintaining the availability of the product. In short-term rentals, customers do not have the need for the products consistently and thus rent the Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 6 6 Table 1. Value creation elements Value proposition elements Value capture elements Societal value proposition Customer value proposition Asset or resource optimization Reduced pollution Increased revenue Periodic payments Product as a service Reduced resource use Cost savings Transaction fees Replacement Environmental improvements Time savings Pay-per-use Selling used products Health benefits Risk reduction Product sales Waste to value Extended product life cycle Convenience Licensing Reduced waste Functional value Waste management fees Brand benefits Table 1. Circular business model elements. 11 Brand benefits Table 1. Circular business model elements. 4.1 Identified value creation elements We begin by answering to our first research question: what types of value creation elements do firms highlight in their circular business models? Five second-level codes of circular economyrelated value creation elements occurring in the cases were identified: 1) asset or resource optimization, 2) product as a service, 3) replacement, 4) selling used products, and 5) waste to value. This division of value creation elements represents a typology rather than a taxonomy because many cases combined multiple types of activities. In Figure 1 we illustrate identified value creation elements and their sub-categories, which were identified as third-level codes. Figure 1. Value creation elements of the studied circular business models. The asset or resource optimization consists of three sub-categories. In many cases, optimization of an asset or a resource was facilitated through an asset sharing marketplace, where the firm gave customers an opportunity to share their underutilized resources with peers, facilitating the optimization of value creation potential of an asset for customers. In consultation or installation services, the firms rely on their expertise of specific customer Figure 1. Value creation elements of the studied circular business models. Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 7 7 products when needed. As the underlying logic, both activities change the customers expenses from capital expenses to operational expenses. The replacement consists of three sub-categories describing alternative solutions to replace existing solutions in the marketplace. When replacing with recycled solutions, firms engage in recycling materials or providing products from recycled materials and offering them as substitutes for non-recycled products. When replacing with renewable solutions, firms offer to customers products that are created from renewable sources, for example by replacing plastic products with wood-based products. For the third option, replacing with generally more sustainable solutions, a firm’s activity was not necessarily directly focused on the material of the product but rather on the systemic sustainability effect of it, such as in the case of replacing meat with plantbased alternatives. The selling used products consists of two subcategories that enable customers to choose used products rather than new products. In firms buying, restoring, and selling products, the focal firm engages in the acquisition and processing of used products at scale and often refurbishes and remanufactures products that might otherwise be no longer usable. In peer-to-peer secondhand marketplaces, firms take a more distant role in the physical exchange of the product and focus on connecting the supply and demand. In some of these cases, the firm handles short-term storage and the delivery of the product between peers, while in other cases, the firm never touches the physical product and only facilitates the connection and communication between peers. The waste to value consists of four sub-categories that all turn waste materials into valuable resources in different ways. Three activities are directly related to recycling, namely technology for recycling, recycled materials from waste and products from recycled materials. These are all connected and form a value chain for turning waste back into products. However, because these activities are performed in separate business models based on the case data analyzed, they emerged as separate codes during the data analysis. The fourth activity, waste to energy, is more distinct one as it is focused on extracting value from materials that leak from the circular system. Biofuel operators extracting fuel from biowaste are examples of this type of activity. Identified links between value creation and value proposition elements Next, we answer to our second research question: what types of value creation and value proposition elements are complementary with each other? After identification of different value creation elements, we moved forward to analyze different forms of customer and societal value propositions that the studied companies provide. Figure 2 illustrates cooccurring societal and customer value propositions in relation specific value creation elements, implying strong (0,39<co-occurrence), intermediate (0,25<cooccurrence) and low (0,10<co-occurrence) correlation between the business model elements. Detailed cooccurrence values are presented in Appendix B. Next, we will introduce the details of correlating value creation and value proposition elements. Asset or resource optimization most frequently cooccurred with reduced pollution, reduced resource use, and improvement for the environment in terms of societal value propositions. For example, LeaseGreen, a firm that provides services for improving the energy efficiency of buildings, highlights that it had reduced with its project “around 120,000 tons of CO2 over their life cycles.” In relation to customer value, asset or resource optimization was proposed to lead to increased revenue, cost savings, and time savings. Thus, the customer value propositions were proposing heavily lean towards quite traditional value perspectives. In product as a service, the most frequently cooccurring societal value propositions were reduced resource use, health benefits, and extended product life cycle. Thus, a social dimension of value from the triple bottom line approach can be identified in this type of value creation activities. Often, the firms of this type were linked to transportation services and proposed that their services could make customers more engaged in physical exercise by opting for service-based transportation rather than use of private cars. The most frequently co-occurring customer Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 8 8 value propositions were risk reduction, convenience, and functional value, indicating that firms involved in these activities are primarily not focused on directly measurable economic benefits for the customer but rather on providing convenient services that the customers can easily switch to. For example, Lindström provides work clothes as a service and highlights in their value proposition that “customers have easy access to clean, serviced, safe clothes that meet the required quality standards.” In replacement, reduced pollution, reduced waste, and reduced resource use co-occurred most frequently as societal value propositions. For example, CrossLam, a company replacing concrete elements with wooden elements in construction industry, states that “traditional concrete construction produces plenty of carbon dioxide emissions and consumes a lot of energy and resources” as opposed to wooden elements, which “commit carbon to buildings and reduce atmospheric emissions.” In relation to customer value, these types of value creation elements co-occurred most frequently with functional value, cost savings, and brand benefits, which indicates that they rely on customers who are not expected to make decisions solely based on economic value. In selling used products, extended product life, reduced waste, and reduced resource use were, perhaps not surprisingly, the most frequently cooccurring societal value propositions. In terms of customer value, risk reduction, increased revenue, and cost savings occurred most frequently, all representing economically oriented value dimensions, which is an interesting finding in comparison to activities associated with replacement. In waste to value, the most often co-occurring societal value propositions were reduced waste, reduced pollution, and reduced resource use, whereas, brand benefits, cost savings, and functional value were the most frequently co-occurring customer value dimensions. While increased recycling is the most traditional way to improve the circularity of materials, our findings indicate that recycling types of business activities do not only conform to traditional economic value because brand benefits implicate value emerging from a perception of sustainability. For example, Fortum, which produces plastic products from waste plastics, states in its value proposition that “by producing a product with a lower carbon footprint, the customer improves their brand and public image.” 14 Figure 2. Correlating value creation and value proposition elements. Asset or resource optimization most frequently co-occurred with reduced pollution, reduced resource use, and improvement for the environment in terms of societal value propositions. For example, LeaseGreen, a firm that provides services for improving the energy efficiency of buildings, highlights that it had reduced with its project “around 120,000 tons of CO2 over their life cycles.” In relation to customer value, asset or resource optimization was proposed to lead to increased revenue, cost savings, and time savings. Thus, the customer value propositions were proposing heavily lean towards quite traditional value perspectives. In product as a service, the most frequently co-occurring societal value propositions were reduced resource use, health benefits, and extended product life cycle. Thus, a social dimension of value from the triple bottom line approach can be identified in this type of value creation activities. Often, the firms of this type were linked to transportation services and proposed that their services could make customers more engaged in physical exercise by opting for servicebased transportation rather than use of private cars. The most frequently co-occurring customer value propositions were risk reduction, convenience, and functional value, indicating that firms Figure 2. Correlating value creation and value proposition elements. Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 15 15 Payne, A., Frow, P., Eggert, A., 2017. The customer value proposition: evolution, development, and application in marketing. Journal of the Academy of Marketing Science, 45(4), 467–489. 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Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 17 17 Appendix A. Basic information about the firms whose circular economy business models were studied Firm Name Main business Established Employees 3StepIt IT equipment management 1997 > 250 24Rent Car sharing 2011 1 - 10 Amerplast Plastics 1952 > 250 Aquazone Waste-water treatment 2009 1 - 10 Arctic Biomaterials Bio-based plastics 2014 10 - 250 Betulium Biotechnology 2013 1 - 10 BioGTS Bioenergy 2011 10 - 250 Crisolteq Industrial waste processing 2005 10 - 250 CrossLam Construction materials 2014 10 - 250 Destaclean Recycled construction materials 1998 10 - 250 OP DriveNow Finance, Car sharing 1902 > 250 Durat Interior design products 1990 10 - 250 Ecolan Organic Fertilisers 1995 10 - 250 Eko-expert Recycled construction materials 1990 10 - 250 EkoRent Car sharing 2014 1 - 10 Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 18 18 Firm Name Main business Established Employees Ekox IT equipment management 2015 10 - 250 Emmy Second Hand Second hand clothes 2015 10 - 250 Enevo Smart waste management 2010 10 - 250 Entocube Insect farming technology 2014 1 - 10 eRENT Equipment sharing platform 2015 1 - 10 Fescon Materials 1984 10 - 250 Finlayson Textiles 1820 10 - 250 Finsect Insect farming 2015 1 - 10 Fluid Intelligence Industrial maintenance 2016 1 - 10 Fortum Treatment of hazardous waste 1971 > 250 Gasum Natural gas, biogas and LNG 1994 > 250 Globe Hope Textiles 2001 10 - 250 Gold&Green Food 2015 10 - 250 Helsieni Urban farming 2016 1 - 10 Infinited Fiber Textile production technology 2015 1 - 10 Innorent Movable facilities 2016 1 - 10 Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 19 19 Firm Name Main business Established Employees Jarmat Chemical products 2000 1 - 10 Kekkilä Organic Fertilisers 1924 10 - 250 Pääkaupunkiseudun kierrätyskeskus Sales of second hand products 1990 > 250 Konecranes Cranes and lifting equipment 1994 > 250 Kotkamills Paper and cardboard products 1990 > 250 LeaseGreen HVAC systems 2013 10 - 250 LemKem Lighting equipment 1985 10 - 250 Lindström Textile rental 1848 > 250 Lovia Textiles 2014 1 - 10 Lassila & Tikanoja Waste management, recycling 1905 > 250 ResQ Club Platform for selling surplus food 2015 10 - 250 Maapörssi Service for sales of surplus excavation material 2006 1 - 10 MaaS Global Mobility as a service 2015 10 - 250 Martela Office furniture 1945 > 250 Metener Biomass treatment technology 2001 1 - 10 Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 20 20 Firm Name Main business Established Employees Naava Intelligent interior green walls 2011 10 - 250 Neste Oil and renewable fuels 1948 > 250 Netflea Online second-hand retail 2014 1 - 10 Netled Vertical farming solutions 2007 1 - 10 Nettix Equipment sharing platform 2000 10 - 250 Novarbo Vertical farming solutions 2010 10 - 250 Palpa Deposit-based bottle return system 1996 10 - 250 Paptic Bio-based packaging materials 2015 10 - 250 Pa-Ri Materia Sales of used office furniture 1997 10 - 250 Ponsse Forest machinery 1970 > 250 Pure Waste Textiles 2013 1 - 10 Raisioagro Agricultural feed products 1948 10 - 250 Rakeistus Recycled fertiliser 2012 1 - 10 Remake Textiles 2007 1 - 10 Rent-a-Park Parking services 2013 1 - 10 RePack Reusable packaging 2011 1 - 10 Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 21 21 Firm Name Main business Established Employees Robbes Smart greenhouses 2001 10 - 250 ShareIt Blox Car Car sharing 2015 1 - 10 Sharetribe Platform for second hand product sales and rentals 2011 10 - 250 Silmusalaatti Food 2012 1 - 10 Skipperi Equipment sharing platform 2016 1 - 10 Soilfood Recycled nutrients and fertilisers 2015 10 - 250 Solnet Solar power systems 2014 1 - 10 Spinnova Textiles 2014 1 - 10 SR Harvesting Recycled spare parts 2010 10 - 250 St1 Oil and renewable fuels 1997 > 250 Sulapac Biodegradable packaging 2016 1 - 10 Suomen Savupiipputeollisuus Recycled construction materials 2016 1 - 10 Swap Online second-hand retail 2012 > 250 Swappie Refurbished phones 2015 1 - 10 Taitonetti Refurbished computers 2005 10 - 250 Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 22 22 Firm Name Main business Established Employees Tamturbo Industrial air compressors 2010 10 - 250 Tarpaper Recycled materials 2013 1 - 10 Tori Online second-hand retail 2009 10 - 250 TouchPoint Textiles 2008 1 - 10 Tracegrow Recycled fertilisers 2012 1 - 10 UPM Raflatac Adhesive laminates, biocomposites 1975 > 250 Valtavalo Lighting installations and products 2008 10 - 250 Valtra Agricultural machinery 1990 10 - 250 Watrec Industrial biogas plants 2003 10 - 250 Venuu Marketplace for renting venues 2013 10 - 250 Verhoilijamestarit Furniture upholstering N/A 1 - 10 VersoFood Food 2010 1 - 10 Wimao Biocomposites 2015 1 - 10 Zadaa Online second-hand retail 2015 1 - 10 Zenrobotics Waste-sorting technology 2007 10 - 250 Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 23 23 Appendix B. Co-occurrences between value creation, value proposition and value capture elements. Societal value proposition elements Customer value proposition elements Value capture elements Asset or resource optimization (n=20) •Reduced pollution (0,4) •Reduced resource use (0,34) •Environmental improvements (0,25) •Increased revenue (0,4) •Cost savings (0,38) •Time savings (0,27) •Periodic payments (0,39) •Transaction fees (0,35) Products as a service (n=11) •Reduced resource use (0,28) •Health benefits (0,22) •Extended product life (0,15) •Risk reduction (0,33) •Convenience (0,32) •Functional value (0,24) •Periodic payments (0,27) •Pay-per-use (0,27) Selling used products (n=15) •Extended product life (0,4) •Reduced waste (0,3) •Reduced resource use (0,22) •Risk reduction (0,41) •Increased revenue (0,4) •Cost savings (0,35) •Transaction fees (0,41) •Product sales (0,23) Replacement (n=24) •Reduced pollution (0,5) •Reduced waste (0,3) •Reduced resource use (0,29) •Functional value (0,36) •Cost savings (0,34) •Brand benefits (0,29) •Product sales (0,48) •Licensing (0,36) Waste to value (n=34) •Reduced waste (0,67) •Reduced pollution (0,35) •Reduced resource use (0,27) •Brand benefits (0,47) •Cost savings (0,47) •Functional value (0,28) •Product sales (0,65) •Waste management fees (0,26) Journal of Business Models (2023), Vol. 11, No. 5, pp. 1-24 24 24 Appendix C. Co-occurring value creation types and their Sorensen’s co-efficients. Value creation elements Co-occurring value creation elements Asset or resource optimization •replacement (0,18) •waste to value (0,11) •products as services (0,06) •selling used products (0,06) Products as services •asset or resource optimization (0,06) Selling used products •asset or resource optimization (0,06) •replacement (0,05) Replacement •asset or resource optimization (0,18) •waste to value (0,14) •selling used products (0,05) Waste to value •replacement (0,14) •asset or resource optimization (0,11)