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

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 businesses. Based on our analysis, we propose that business model complementarity should be thoroughly considered in future efforts to develop more ambitious circular business models.