How Circular Business Models Are Shaping Success

Foundations of Circular Business Models

Ruby Sturt: Hey everyone, welcome back to the IBDP Business Management success podcast! I’m Ruby, and as always I’m joined by Eric—who, I swear, brings the circularity full circle every week, right Eric?

Eric Marquette: Ah, you flatter me, Ruby. I do try, but only because these circular models, well, they’re more than just a trendy business buzzword. They’re genuinely re-shaping how companies think about value, growth, and our, uh, planetary limits.

Ruby Sturt: Yeah, and for anyone thinking, “Didn’t you two talk about sustainability and circular approaches before?”—guilty as charged. But today we’re, like, laser-focusing on what actually makes a circular business model tick. So picture this: instead of the old-school “take-make-dispose” routine—grab resources, use 'em, toss 'em—we’re shifting to frameworks that keep materials flowing, cut out waste, and, honestly, just respect the planet a bit more.

Eric Marquette: Exactly. In a linear system, you’ve got depletion, pollution, and heaps of rubbish. Circular models… flip the script. They’re all about designing products and processes so that waste is prevented before it even exists. It’s “waste not, want not” on a business scale.

Ruby Sturt: Right—and the key principles? ‘Eliminate waste and pollution’ from the get-go. Then ‘circulate products’ so we’re reusing, refurbishing, recycling or even composting instead of binning things. And my favourite—‘regenerate nature’. That’s not just stopping harm, but actually putting good stuff back into ecosystems. Like, businesses supporting biodiversity, or using regenerative farming. Big vibes.

Eric Marquette: Big vibes indeed. And honestly, it’s not some abstract concept—I mean, there’s real value in sourcing reused materials, creating new business opportunities, and, frankly, differentiating yourself in the market. That—wait, Ruby, didn’t your local bakery have a story that nails all this?

Ruby Sturt: Yeah! So, quick tangent—but good one, I promise. There’s this little bakery near me. Used to just toss all their food scraps and unsold breads into the general waste every night. But then someone suggested they start composting, and suddenly, landfill waste drops, council fees drop, and they start chatting with this local farmer who uses compost for her veggies… and it turns into this mini circular ecosystem, right on my street. The owner told me, “It wasn’t just about the planet, we’re literally saving money now.” Feels small, but that’s, like, circular thinking in a nutshell: design out the waste, keep stuff cycling, and give back to nature.

Eric Marquette: Brilliant story. And that links us right into how these principles show up in bigger, more complex businesses…

Types & Real-World Examples

Eric Marquette: So, Ruby, let’s break down the main types of circular business models because they all come at waste reduction and resource efficiency in their own way. There’s, let’s see—circular supply, where companies use renewable or recyclable materials from the start. That’s a material innovation play. Then resource recovery, which is all about capturing value at the end—think recycling or upcycling. Product life extension is my, uh, tiny obsession—because it’s about designing products to last, be repaired, or refurbished. Sharing platforms—so people share access, not ownership. Product as a Service, or PaaS, where you lease or subscribe instead of buy outright. And then, coordinating value chains with data and tech—making sure every stage is optimised for circularity.

Ruby Sturt: Totally, and these all sound a bit academic until you see real companies doing it. Like, take Apeel Sciences—they came up with this edible, plant-based coating for fruits and veggies. Keeps 'em fresh longer, slashes food waste, and even ditches the need for single-use plastic wrap. That’s, like, product life extension meets waste elimination in supermarkets near you.

Eric Marquette: And Le Parfait—those glass containers you see in fancy food shops? Totally reusable, tough as nails, and designed so people can avoid single-use packaging altogether. Every home chef, including me with my, um, “hit or miss” pickling, they all get another use out of that jar. It’s reuse in action.

Ruby Sturt: ENGIE’s a good one too—an energy company using a Product as a Service model. Their clients use power—and ENGIE manages the efficiency, not just the supply. Basically, the customers pay for, like, performance and savings, not just raw kilowatt hours. Everyone’s motivated to use less, not more.

Eric Marquette: Let’s not forget the Patagonia story—it’s a classic. They convinced people to repair and resell old outdoor gear, rather than toss it and buy new. I actually tried to fix my old jacket after seeing their campaign. Ended up with, um, a patchwork that was more “unique fashion statement” than “practical outerwear”.

Ruby Sturt: You get points for effort, though! Seriously though, Patagonia made repairs cool again—and gave people a sense of pride keeping stuff going longer. And even IKEA’s dipping in, trialling furniture leasing and buy-back, really pushing for products to get a second and third life. That’s circular supply and product extension rolled into one iconic blue bag.

Eric Marquette: Yeah, these aren’t just nice-to-haves—they’re actually driving business growth, which leads us into why all this matters for not just the planet, but actual business success.

Benefits, Challenges, and Business Management Connections

Eric Marquette: So, let’s talk why businesses are actually investing in circular models. On the economic side, there’s more than virtue signalling—there’s fresh revenue streams from things like subscriptions, repairs, or resale. Plus, efficient resource use cuts long-term costs. For born-circular companies, that’s been a major competitive edge.

Ruby Sturt: And on the environment—this is the stuff that helps with greenhouse gases and resource depletion. Like, not just “doing less harm”, but genuinely taking the pressure off the system by using less, reusing more, creating, like, circular jobs and building a better business rep. I mean, who doesn’t wanna buy from a brand that walks the talk?

Eric Marquette: Exactly, and it also builds operational resilience. Remember from our MNCs episode—supply chain disruptions can really hurt, but circular models let you source locally, recover materials, and stay flexible. It becomes a strategic advantage. And don’t forget, regulations are only getting tighter on waste and emissions. Being ahead of that curve is, well, sound management.

Ruby Sturt: But—it’s not all smooth sailing. The real-life hurdles? It can be tough to make these models profitable at scale. Like, redesigning supply chains, collaborating across old industry silos—kind of turns the whole ship around. Plus, different countries, different standards, and sometimes people are just, like, “Err, do I want a repaired toaster or do I just want a new one?” Habits are stubborn.

Eric Marquette: And measurement! Tracking your actual circular impact isn’t as clear-cut as, say, reading a profit and loss statement. Scaling what works takes serious analytical muscle and some risk tolerance. A lot of companies start small—pilot programs, testing what fits their business before upending everything. Using solid data analytics can honestly make or break these transitions.

Ruby Sturt: And for IB Business Management students, this is where your toolkit comes in. Remember SWOT analysis? Circularity’s a big “Opportunity” in the environmental and strategic sense—and, honestly, also a “Threat” if you ignore it and get left behind. And the Ansoff Matrix? Sometimes, adopting circular products is really just “Market Development” or “Product Innovation” jazzed up with climate credentials.

Eric Marquette: Plus, the big take-away: companies asking “How can we use less, waste less, and give more back?” end up more resilient, more innovative, and—increasingly—more successful. It’s not about charity, it’s smart strategy in a changing world.

Ruby Sturt: Alright, we’re gonna leave it there for today—lots to chew on, lots of ideas for your essays or case studies! If you’re keen, keep an eye out for our next mini-episode, where we’ll dive into even more examples of business innovation in real time. Eric, thanks for geeking out with me again!

Eric Marquette: Always a pleasure, Ruby. And thank you to our brilliant listeners—don’t forget to hit subscribe so you never miss an episode. Catch you next time, mate.

Ruby Sturt: Thanks everyone, see ya soon!