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Business Model Design for Strategic Sustainable Development
Blekinge Institute of Technology, Faculty of Engineering, Department of Strategic Sustainable Development. (Sustainability-driven Innovation)
2017 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

Humanity confronts an existential threat without historic precedent. Environmental pressures have reached such intensity and pace of change that the earth system may be irreversibly tipped into a new and unpredictable state. The emerging global reality is, in turn, redefining overall conditions for business success. Addressing these challenges both demands and brings great opportunities for innovation. An important and sometimes neglected aspect of innovation is the design or redesign of business models, which has been identified as a greater source of lasting competitive advantage than new products and services per se. The business model has also been suggested as a new unit of analysis when discussing sustainability. However, this is still a relatively underexplored area. The aim of this work was therefore to develop an approach to business model design that supports strategic sustainable development, i.e., supports organizations to contribute to society’s transition towards sustainability in a way that strengthens the organization.    

 

To be able to design a business model that supports strategic sustainable development, it is necessary to know what sustainability is and how to develop sustainability-promoting, economically viable strategies. Therefore, the Framework for Strategic Sustainable Development, which includes, e.g., an operational definition of sustainability and strategic guidelines for how to approach it, was used as an overarching framework. Specific research methods and techniques included, e.g., literature reviews, questionnaires, interviews, work with focus groups, participatory action research with partner organizations, creative problem solving techniques, modeling, and simulation.

 

The literature reviews revealed potential sustainability benefits of developing business models in conjunction with product-service systems (PSS). However, a knowledge gap exists regarding how to effectively connect these fields. Arguably, PSS strategies can best contribute to sustainability when business models support their implementation and when both the business models and the PSS strategies are guided by an understanding of strategic sustainable development. Therefore, an integrated approach to Business Model Design for Strategic Sustainable Development was co-developed and tested in PSS innovation work with partners, e.g., companies within the energy and lighting sectors. The tests indicated that the new approach helped to clarify strengths and weaknesses of current business models from a strategic sustainability perspective; to transform an organization’s vision and strategy into a sustainability-framed vision and a sustainability-promoting strategy; and to communicate the new vision and strategy to the value network as a basis for engaging important stakeholders in the change. For example, the approach supported one of the partner companies in its transformation towards providing sustainable PSS solutions in the form of light as a service.

Examples of business benefits of the new approach include improved scalability and risk avoidance, which provide a foundation for better investment strategies. Benefits also include improved differentiability and a broadened view on, and a more solid foundation for, collaboration with stakeholders that are increasingly important to sustainable business success.

Place, publisher, year, edition, pages
Karlskrona, Sweden: Blekinge Tekniska Högskola, 2017. , 204 p.
Series
Blekinge Institute of Technology Doctoral Dissertation Series, ISSN 1653-2090 ; 01
Keyword [en]
Business Model Innovation and Design, Strategic Sustainable Development, Sustainability, Sustainable Development, Sustainable Product-Service Systems, Value Network.
National Category
Natural Sciences Social Sciences Business Administration
Identifiers
URN: urn:nbn:se:bth-13674ISBN: 978-91-7295-334-5 (print)OAI: oai:DiVA.org:bth-13674DiVA: diva2:1060784
Public defence
2017-01-27, J1650, Campus Gräsvik, Blekinge Institute of Technology, Karlskrona, Sweden, 09:15 (Swedish)
Opponent
Supervisors
Available from: 2016-12-30 Created: 2016-12-29 Last updated: 2017-03-07Bibliographically approved
List of papers
1. District Heating and CHP: A Vital Role for the Development towards a Sustainable Society?
Open this publication in new window or tab >>District Heating and CHP: A Vital Role for the Development towards a Sustainable Society?
2012 (English)In: Latest trends in sustainable and green deveopment - Proceedings of the 3rd International Conference on Urban Sustainability, Cultural Sustainability, Green Development, Green Structures and Clean Cars (USCUDAR 12), WSEAS Press , 2012, 157-167 p.Conference paper, (Refereed)
Abstract [en]

In Sweden, district heating (DH) is quite well developed and is already mainly based on non-fossil fuels. Increased use of DH is therefore considered as a way of phasing out fossil energy for heating purposes. Furthermore, increased use of DH provides an increased basis for combined heat and power production (CHP). Considering that coal condensing is the marginal production of electricity in Europe, increased use of bio-fueled CHP leads to even greater reductions of global carbon dioxide (CO2) emissions. However, in a sustainable society, where there is no longer a systematic increase of CO2 (and no other sustainability problems), the benefits of DH are less obvious. The aim of this work is to explore the impact of DH and CHP in the development towards such a society. A local energy system is studied for five different time periods from 2010 to 2060 with different marginal technologies for electricity production. Results show that when the local energy utility co-operate with a local industry plant and invests in a new CHP plant for waste incineration the global CO2 emissions for the whole studied time period will be reduced with about 48 000 tonnes, which corresponds to over 100 % of the emissions from today’s system for the same time period. When considering that bio fuel is a scarce resource, and that the amount of CO2 emission linked to waste probably will be lower in sustainable society, the global CO2 emissions will be about 250% lower compared to the system of today. The studied DH related cooperation and introduction of CHP will reduce the system cost for the whole studied energy system with 2 500 MSEK for the studied period. In general, the results indicate that the modeled measures will not have any major advantages over other heating technologies in a sustainable society but that it can play a vital role for the development towards such a society.

Place, publisher, year, edition, pages
WSEAS Press, 2012
Series
Recent Advances in Computer Engineering Series, ISSN 2227-4359 ; 5
Keyword
Sustainable Society, Energy Systems, District Heating, Combined Heat and Power, Global CO2 Emissions, Coal-fired Condensing Power Plant.
National Category
Natural Sciences Social Sciences
Identifiers
urn:nbn:se:bth-13599 (URN)978-1-61804-132-6 (ISBN)
Conference
3rd International Conference on Urban Sustainability, Cultural Sustainability, Green Development, Green Structures and Clean Cars (USCUDAR), Barcelona
Available from: 2016-12-13 Created: 2016-12-13 Last updated: 2017-03-07Bibliographically approved
2. Sustainability Self-Assessment and Business Model Design
Open this publication in new window or tab >>Sustainability Self-Assessment and Business Model Design
2012 (English)In: Proceedings of the 17th Sustainable Innovation Conference, 2012, 89-100 p.Conference paper, (Refereed)
Abstract [en]

The business case of sustainability has been argued for by many authors (Willard, 2005; McNall et al., 2011). There is a large degree of consensus regarding the potential business impact of sustainability. However, most companies either are not acting or are falling short on execution (MIT Sloan, 2009). Relatively few companies consider innovation for sustainability substantially rewarding. Suggested solution for this includes better access to frameworks for understanding sustainability and value creation and the business cases thereof (MIT Sloan, 2009). Furthermore, it is well-known that support for generation and selection of ideas and for formulating goals and strategies is especially essential to have during the early phases of the innovation process (Roozenburg & Eekels, 1995).

 

The usual absence of an operational definition of sustainability is still a major barrier to corporate strategic sustainable development (Holmberg & Robèrt, 2000). A sustainability definition that can guide assessment of the current situation and stimulate generation of ideas for upstream solutions and strategic guidelines that can aid prioritization of early smart actions are among the most promising leverage points. A framework including those features is being developed in an international consensus process since twenty years (see, e.g., Robèrt et al., 2012). Among other things, this framework for strategic sustainable development FSSD, clarifies the self-interest in sustainability work and thus supports more widespread and proactive sustainable innovation. 

In this study, the FSSD is used as the main basis for a new tool to be used in early phases of the innovation process for self-assessment of an organization’s current maturity and performance from an overall strategic sustainability point of view and for stimulating generation of ideas for business models design. We present a prototype version of such a tool and results from initial tests of this tool performed in four organizations. We study in particular whether the outlined tool is perceived by the organizations to be: (i) easy to comprehend, (ii) relevant, (iii) capable of differentiating the organizations in a comprehensive way, (iv) helpful for discovering insufficiencies that the organizations are not already aware of and (v) helpful for generation and selection of ideas for upstream solutions, business model innovation and for formulation of goals, and strategies. 

National Category
Natural Sciences Social Sciences
Identifiers
urn:nbn:se:bth-13596 (URN)
Conference
17th Sustainable Innovation Conference, Bonn
Available from: 2016-12-13 Created: 2016-12-13 Last updated: 2016-12-29Bibliographically approved
3. An approach to business model innovation and design for strategic sustainable development
Open this publication in new window or tab >>An approach to business model innovation and design for strategic sustainable development
Show others...
2017 (English)In: Journal of Cleaner Production, ISSN 0959-6526, E-ISSN 1879-1786, Vol. 140, 155-166 p.Article in journal (Refereed) Published
Abstract [en]

Successful business is increasingly about understanding the challenges and opportunities linked to society's transition towards sustainability and, e.g., being able to innovate, design and build business models that are functional in this context. However, current business model innovation and design generally fails to sufficiently embrace the sustainability dimension. Typically, the business case of sustainability is not understood profoundly enough; the planning horizon and system scope are insufficient; the competence to bring together people into systematic ventures towards sustainable business is too low. A unifying framework for sustainability analyses, planning, cross-disciplinary and cross-sector cooperation, and cohesive use of the myriad sustainability tools, methods and concepts has been developed: the Framework for Strategic Sustainable Development (FSSD). Similarly, a generic approach to business model design has been put forward: the Business Model Canvas (BMC). In this paper we explore how the FSSD could inform business model innovation and design by combining it with the BMC and supplementary tools, methods and concepts such as creativity techniques, value network mapping, life-cycle assessment, and product-service systems. The results show that the FSSD-BMC combination can support business model innovation and design for strategic sustainable development, as well as strengthen each supplementary tool, method and concept in its own primary purpose. We apply the combined approach, for the purpose of initial testing and presentation, to a real case of business model evolution. Based on our findings we propose a new approach to business model innovation and design for strategic sustainable development. The new approach facilitates, e.g., business scalability and risk avoidance and clarifies the interplay between classical business model development and strategic sustainability thinking. The new approach highlights the opportunity for novel business model design for future sustainable success.

Place, publisher, year, edition, pages
Elsevier, 2017
Keyword
Business model design Strategic sustainable development Sustainable business model Sustainable product-service systems
National Category
Natural Sciences Social Sciences
Identifiers
urn:nbn:se:bth-13600 (URN)10.1016/j.jclepro.2016.06.124 (DOI)
Available from: 2016-12-13 Created: 2016-12-13 Last updated: 2016-12-29Bibliographically approved
4. Exploring the Nexus of Product-Service Systems, Business Models and Sustainability - a need for strategic and practical approaches
Open this publication in new window or tab >>Exploring the Nexus of Product-Service Systems, Business Models and Sustainability - a need for strategic and practical approaches
Show others...
2017 (English)In: Journal of Cleaner Production, ISSN 0959-6526, E-ISSN 1879-1786Article in journal (Refereed) Submitted
Abstract [en]

Product-Service Systems (PSS) have been identified as potentially important for addressing sustainability challenges. However, progress has been relatively slow as regards realizing this potential, and a lack of practical approaches to the design of business models capable of supporting implementation of such PSS has been proposed as a partial reason. The aim of this study is to explore connections and the potential functional nexus between the three fields of PSS, Business Models and Sustainability, in pursuit of possible key enablers to further realization of the potential for sustainability-promoting PSS. A systematic review and analysis of the academic literature is performed. The review shows that, although a relatively new and unexplored endeavor, there is growing effort at the interface of the three fields. The review indicates that the main deficit so far is that the PSS and business model fields lack concrete guidelines and practical tools for how to embrace the sustainability dimension in a strategic way. Especially the strategic dimension emerges as a general finding from diverse sources as a potential key enabler for mutual benefits across the three fields. The study thus points to the need for research aiming at developing such guidelines and tools, and also at exploring case-based applications to create experiential knowledge, to fill the gaps in current theory and practice.

Place, publisher, year, edition, pages
Elsevier, 2017
Keyword
sustainability, strategy, sustainable product-service systems, sustainable business model, systematic literature review, strategic sustainable development.
National Category
Natural Sciences Social Sciences
Identifiers
urn:nbn:se:bth-13673 (URN)
Available from: 2016-12-29 Created: 2016-12-29 Last updated: 2016-12-30Bibliographically approved
5. Systematic Guidance for How to Integrate a Strategic Sustainability Perspective in Core Business Decision Systems
Open this publication in new window or tab >>Systematic Guidance for How to Integrate a Strategic Sustainability Perspective in Core Business Decision Systems
2009 (English)In: Proceedings of the 17th International Conference on Engineering Design, 2009, 385-396 p.Conference paper, (Refereed)
Abstract [en]

Sustainability integration in core business and product development has been a challenge, even if many supporting methods, tools and concepts are available today. However, these are mainly focusing on specific environmental aspects and are often failing to serve companies in integrating sustainability thinking into their strategic decision processes, and consequently into their core business and product development. In this study a previous proposal for an approach to assessing the current state of sustainability integration in company decision systems was used at two case companies, ABB High Voltage Cables and Hammarplast AB. The purpose was to develop this approach further so that it can better assist decision makers (when initial assessment points to such gaps) to integrate sustainability thinking into the strategic decision processes, i.e. align vision, management system and tools to help prioritize actions in a backcasting plan for a sustainable company within a sustainable society. The developed approach includes a SWOT analysis supported strategic capability assessment, and genericguidelines for how to identify appropriate targets, which can also serve as a basis for development of indicators – all informed by a framework for strategic sustainable development.

Keyword
sustainability principles, backcasting, framework for strategic sustainable development, strategic decision processes, goal-oriented indicators.
National Category
Natural Sciences Social Sciences
Identifiers
urn:nbn:se:bth-13566 (URN)
Conference
International Conference on Engineering Design (ICED), Stanford University, USA
Available from: 2016-12-09 Created: 2016-12-09 Last updated: 2016-12-29Bibliographically approved

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Output format
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