Circular Approach 'Service'

A circular service replaces the traditional purchase of a product with its hiring. The product is owned by the producer or the service company, while the permission to use the product instead of the product itself is sold.1 The business is responsible for the whole life cycle of the product and is therefore interested in a durable design, quality, reuse and resource recovery. It profits from a cheap and direct resource income stream sourced from its own products and components while reducing its resource consumption. An incentive to extend the life of a product and to recycle its materials is created. Additionally, the business profits from an informational value due to the repeated contact with the consumer. An improved product quality would increase the customer loyalty as well. 2, 3

The customer only has to pay for the utilization of the product, while the company is responsible for the ownership, the maintenance and the disposal of the product.3 This is a cheaper alternative, especially for very expensive purchases. This could nurture smaller entrepreneurships and start-ups.

References:

1 Tukker, Arnold Prof. Dr.: Product-Service Business Models - CircularX_2015_2_8_Key_Arnold_1 OLD in: Online-Portal: Youtube. URL: https://www.youtube.com/watch?v=U2aZnDUV1Vg (besucht am 07.07.2016). Archived by WebCite® http://www.webcitation.org/6iorVStRB. Rotterdam, Niederlande: Erasmus University Rotterdam, 2015

2 van der Laan, Erwin Dr.: Informational Value - CircularX_2015_2_4_in_Erwin_3 OLD in: Online-Portal: Youtube. URL: https://www.youtube.com/watch?v=BFYk-nuSzU8 (besucht am 07.07.2016). Archived by WebCite® http://www.webcitation.org/6ioqVZegn. Rotterdam, Netherlands: Erasmus University of Rotterdam, 2015

3 Lacy, P.; Rutqvist, J.: Waste to Wealth - Executive Summary. Basingstoke (UK): Palgrave Macmillan, 2015