Which element of the business model addresses what a firm provides that other firms cannot

14.2 A business model framework

The concept of a business model is used in many different ways (Baden-Fuller and Morgan, 2010). Here, we use it as a form of recipe to conduct business (Prahalad, 2004) by presenting how certain aspects of the business models play important parts in supporting success in the case firms and the industry. The term “business model” evokes the image of a description of business-related activities and is, therefore, partly self-explanatory. It is a concept that makes up a new unit of analysis and as such, it offers a systemic understanding of the factors that are considered to be important to explain how value is produced and harnessed by a firm. Although value is central, it is important to point out that the business model is conceptual, rather than a financial, model of a firm (Teece, 2010). As such, it is thought to describe how and why a firm provides a product or service on a competitive market by credibly presenting what it is that motivates the actors that are involved in the value creation, as well as the factors that enable the firm to capture value (Teece, 2010).

In order to study business models of actual firms, many researchers rely on so-called “business model frameworks” (Demil and Lecocq, 2010). As a business model framework is a theory-dependent description of the firm, its internal workings, and its relationships, the definition of a framework often takes the form of a normative statement about what should be included in it (Sanchez and Ricart, 2010). Here, we present a framework that is compiled based on the previous business model research. It consists of four thematic areas, which can be said to be common to most business model frameworks:

Value offering, which describes customer value, customer relations, and market-segmenting (e.g., Teece, 2010)

Resources and activities, which describes how production of the value offering is done through the management of production factors and activities (Amit and Zott, 2001; Zott and Amit, 2010)

Value capture, which describes the fiscal flows and economical aspects of relations to main stakeholders, such as employees, suppliers, owners, and customers (Morris et al., 2005). It also describes other types of intangible values that different stakeholders capture through engaging in the value offer (Haque, 2011).

Long-term competitiveness, which describes the economic durability (Magretta, 2002) and ecological sustainability (Stubbs and Cocklin, 2008) of the business model.

These are four related, yet distinct, parts which, based on their use in the previous business model research literature, can be claimed to be able to generate plausible explanations of success and failure of firms within specific market contexts. As customer demand is that which ultimately gives reason for the existence of a firm active on a competitive market, the customer should be the starting point in a description of a business model. Subsequently, it is necessary to describe how the firm is able to present the value offer to the customer, without generating losses. This is accomplished by exploring resources and activities, as well as the cash flow that emanates from, and goes toward, the stakeholders of the firm. Finally, it is necessary to describe how the firm will sustain its existence in the long run. Long-term competitiveness should, therefore, constitute a description of the resources, processes and competencies, which ensure necessary adaptability to be able to create competitiveness in the future.

The framework’s four parts share some similarities with the four perspectives, which constitute the balanced scorecard framework developed by Kaplan and Norton (1996).2 This is an indication that the framework captures dimensions used elsewhere to evaluate firm strategies. In order to facilitate a better understanding of the four parts of the framework and how these parts are supposed to work together to form a business model, we elaborate on these topics below.

1.4 Recommendations for further development of integrated energy systems

An efficient transition to a smart energy system requires intensive research and development efforts regarding the integration of various energy conversion techniques, system operation frameworks, digitalization, and communication systems, among others. The following suggestions for further research into and development of integrated energy systems are recommended:

Investigate new optimal operation frameworks and control strategies for multiple energy systems. Given the fact that various energy sectors are managed by different entities and that the coordination of different energy sectors is insufficient at present, research should be conducted to coordinate various energy sectors with different operational timescales and characteristics while respecting the privacy of different entities. The development of integrated energy systems should focus on providing secure and reliable energy services to end users.

Design multi-energy carrier markets and develop new business model frameworks. To distribute smart energy system costs and benefits across energy sectors and services efficiently, new regulations and business models should be developed. A corresponding demonstration acting as operational platforms for new business models is needed. In addition, the incentives needed for energy consumers and building management to adopt flexible consumption should be explored.

Develop solutions for the more efficient integration of energy storage and advanced energy conversion technologies to accommodate the growth in fluctuating renewable energy. Optimal operation and smart control of the various energy infrastructures should be investigated in depth, enabling additional flexibility across these infrastructures to efficiently balance and utilize renewable energy, mainly integrated into the power system.

Design and develop low-energy buildings for a green transition. Buildings play an important role as the main consumers in cities. Together with indoor climates and thermal inertia, the potential flexibility of buildings can be utilized. Advanced building energy management and control systems should be developed to interact with the (external) smart energy system and increase energy flexibility.

Develop integrated design and planning methods across energy sectors for integrated energy systems. At present, there are no national policies and regulations regarding integrated energy systems in either China or Denmark. The coordinated design and planning should evolve to remove the barriers between the different energy sectors and facilitate the deployment of smart energy solutions.

4.1 A design for X framework for electric vehicles and white goods

The use of an integrated business model framework is recommended for our two chosen product categories. To elaborate and evaluate the proposed integrated framework (Fig. 7) for the chosen product categories (EVs and WG) we studied selected papers from the keyword co-occurrence analysis, websites of manufacturers for CE-related strategy statements, implementation cases resulting in a more focused Design for X framework shown in Fig. 8.  The Design for X framework is intended to capture shared vision, guide understanding and help explore scenarios of how a CBM may be enabled and challenged along the value chain from value proposition, -creation, - delivery and -capture given a case context, including product design category, sector situation, and key stakeholders.

The Design for X framework uses all business model canvas elements but centers on value delivery instead of value proposition. The framework does not impose a specific order of work, and an iterative approach across the elements is recommended. Based on the challenges and obstacles presented in this review, we believe value delivery to be the critical bottleneck for a successful implementation of a CBM, at least for the studied product categories. A manufacture is likely to serve multiple customer segments and channel configurations facing different cultural challenges or stakeholder conflicts of interest. We recommend separate sheets to define segments and channels to explore customer relations and assess multiple value delivery options for the same or similar value creations.

Notice how the boxes in Fig. 8 form an “X”. Reading from the top of the model, following Bocken et al., (2018), a company-specific “Value purpose and proposition” should state why the organization exists and state why “Slowing resource loops” and “Cycle products for as long as possible” makes business sense and guide design strategies and KPIs for value creation and delivery. Reading from the bottom of the “X”, Bocken et al., (2016) and Lewandowski (2016) suggest an access- and performance-based business model for complex products like EVs. This corresponds with value delivery through sharing platforms and extended product values such as regular upgradation, maintenance, and refurbishment at subsystems or module-level to prevent premature obsolesce. A design for system change and multiple cycles of use, reuse, and reconfiguration will be challenged by the dominant vehicle ownership model, but necessary to avoid an unsustainable rate of new EV production. On the other side of the “X” spectrum, white goods are very mature and low-complexity products, less frequently demanding upgrades or maintenance. The more profitable domestic appliances are those that are “built-in” part of a larger more complex system: homes and commercial real-estate. Considering these segments home/households, facility management, real-estate, construction companies KPIs for value delivery in product life extensions (sustaining real estate value) and hassle-free operation corresponds with design of long-life products, with consumables and services as “integrated” parts of the value proposition. It is therefore interesting to observe the industry cases on subscription/rental models for both EVs and WG. These appear to be growing and successful in at least some customer segments, and coexisting with more traditional product sales and leasing, if quality (long life) and modularity (upgradation, refurbishment and configurability) is properly considered in design. For example, premature obsolescence for styling or new technological features, may be less frequent or decoupled by design of style- and upgrade modules. In that case, a combination of long-life durable products and life extension “modules,” such as EV battery module refurbishment or upgrades or WG self-dosing/cleaning and energy metering modules can deliver value to suit the needs of different customer segments, but even channel partners (in forward and reverse flow).

Across the center vertical axis of the “X”, we find the current state of CE strategies dominating our bibliometric research co-occurrence analysis and industry cases. These are focused on the narrowing of resources (energy, consumables, and materials), waste management, and recycling, which are a good complement and increasingly driven by policy and regulations, but not sufficient by themselves. These apply to both WG and EVs. Effectively closing the loop of materials will depend on the predictability and control of the forward supply chain in receiving quality supplies. These supplies may come from recycled, remanufactured, or reusable content of used products, but this in turn will also require designer choices on material and design for disassembly, in line with recycling process capabilities, overall life cycle energy cost, availability and cost of virgin material, and a feasible, two-way supply chain infrastructure. These challenges capture the challenges and obstacles identified by Korhonen et al., (2018) and Rizos et al., (2016). These highly depend on which policies and regulations apply, which is therefor place between costs and revenue in the bottom value capture theme of the framework. Policy certainty and global sustainable development rules can incentivize further circular business model innovation and design of electric vehicles and white goods, which for now may not be economically viable or limited by stakeholder conflicts of interest or linear business “lock in”.

The current state analysis and the resulting integrated frameworks and recommendations we presented answer research questions 1 and 2, we believe. It should be noted that firstly, as the keyword co-occurrence analysis and literature review confirmed, CE and CBM are still a limited priority topic in the academic debate and product design for these product categories. And secondly, consistent with the literature (Camacho et al., 2018; Cherry and Pidgeon, 2018; Haines-Gadd et al., 2018; Korhonen et al., 2018), we assert culture, consumer behavior in general and acceptance in particular at present may play a greater role than product design to determine the suitability and boundaries of discussed CBMs, particularly PSSs. This does not contradict there is great untapped potential for product design to realize CBMs but the value proposition and value delivery to customers and by stakeholders along the value chain deserve to be centric in product design, rather than the economic and environmental value captured (or lost) and related challenges stated as limits and obstacles for the operationalization of CE.

4.4 Embedding the framework in a visual tool

Before proposing the visual diagram to support the SBM framework, we retrieve to the paper sample and verify a large diversity of visual representations of associated processes, stages, elements or stakeholders in the context of SBMs. Amongst others, there are block diagrams (Dissanayake and Sinha, 2013; Randles and Laasch, 2016; Svensson and Wagner, 2011), arrow diagrams (Barber et al., 2012; Birkin et al., 2009a), two-dimension matrixes (Hart and Milstein, 2003), flowcharts (Allais et al., 2015; Oyegoke, 2014), ovals representation (Hutchinson et al., 2012; Stubbs and Cocklin, 2008); co-centric geometrical forms (Bocken et al., 2013a; Oyegoke, 2014), house-shaped form (Mohan and Potnis, 2010; Torielli et al., 2011), tables (Barber et al., 2012; Hultman et al., 2012; Mettler and Eurich, 2012), and hierarchical representation (Bocken et al., 2014). They all provide benefits and limitations, as expected. Because our proposal is focused on practitioners’ engagement, these previous proposals tend to be oriented to highlight concepts, rather than to be focused on providing a friendly interface. One exception if the value mapping tool (Bocken et al., 2013a), which was built for practitioners engagement through workshops. Our proposal was built towards addressing this gap of visual SBM representation and attempts to provide a new proposal for this.

Following, we explain how previous SBM literature categorization supported our visual representation of SBM elements (Fig. 2). The first SBM category proposed by the literature content analysis highlighted the need for integrating economic, environmental and social dimensions into a SBM value proposition, considering also not only short, but also middle and long-term goals throughout business life cycle stages. Fig. 2 (central part) represents these dimensions, which, in a more concrete way, are translated into SBM products and services (external layer of central part in Fig. 2). Business processes for SBM discussed in the second category and synthesized in Table 2 are also represented by the proposed framework (Fig. 2), representing business' sustainable value creation and delivery system. In turn, the third literature category discussed in Section 3.2, which emphasizes the need to develop a proactive approach on addressing stakeholders' needs, is represented by sustainable value captured by the organization's stakeholders (Fig. 2). Since this proposed visual tool aims to enable discussions with academics and practitioners, we also propose a sequence of questions to guide the discussion guided by the proposed framework. Stage A (1, 2 and 3) comprises questions about each SBM elements to provide description of the business, considering the corporate sustainability principles.

As indicated by the fourth literature category, SBM is an attempt to develop competitive advantage and, at the same time, contribute to global sustainable development. In this sense, we propose that the initial discussion of SBM for a specific organization is complemented by Stage B, composed by a traditional and a sustainability-oriented approach. For the traditional-oriented approach (B1), the proposed framework includes a question for listing company's competitive advantage. For the sustainability-oriented approach (B2), we propose the use of a sustainable development framework, which is provided by the United Nations (United-Nations, 2015): the seventeen SDG's. Filling in for the millennium goals, the SDG's represent the main sustainable development challenges for the period 2015–2030. Although the literature is still incipient at addressing the SDG's (partially because they are relatively recent), these goals provide a more concrete discussion on sustainable development, making reflections around it more productive. For this part of the framework (B2), the discussion is about naming which goal(s) the company is contributing with more emphasis. Questions from Part B have potential to explicit whether sustainability goals contribute to business longevity in the market through competitive advantage, verifying the company's synergy to sustainable development.

The fifth SBM literature category proposed in Section 3.2 includes discussions on the process of sustainable business modelling. The proposed framework is an attempt to provide a tool to support this process. This is because, to close the framework application (Stage C), the discussion is led to retrieving previous answers (from Stage A), by reflecting how SBM elements and aspects of these elements most contribute to competitive advantage and to SDG's. The idea of this sequence (stages A, B, and C), is that the moderator (also referred to as the researcher in the present paper) fills two printed sheets (one for each part of Fig. 2) throughout the process of conducting the questions and discussions. During this process, it is relevant that the moderator pays attention to SBM guidelines (as the ones included in the firth literature category, such as creating value from waste and selling functionality rather than ownership, etc.), serving as SBM innovation opportunities. A deeper description of each SBM elements can be found in Sections 4.1, 4.2 and 4.3.

5 Conclusion

By overlaying the theories of serving BOP markets, the specific characteristics of the off-grid solar market (including barriers to development of the market), and relevant case studies, the following elements of a successful business model framework for enterprises working in the off-grid solar lighting market emerge (see Table 1):

Table 1. Business model framework.

Build active community partnerships: BOP enterprises are most successful when they work directly with the local community. A participatory structure allows for the enterprise to become embedded in the community, to establish legitimacy, and gain knowledge of community norms and institutions. One of the key barriers to the adoption of off-grid solar lighting products is a lack of trust in and knowledge of the products by the community members, and a lack of education about the product. In addition, a lack of formal governance and contracting institutions can inhibit transactions with community members. Local community partnerships and the building of networks with community members and organizations address these obstacles while enhancing the potential for the enterprise to fill notable institutional voids.

Form partnerships between and among social enterprises, commercial ventures, NGOs, local enterprises, and other stakeholder organizations: BOP studies consistently reveal a need for enterprises to create strong partnerships across sectors, with a variety of market and non-market actors, in order to operate in an informal economy, fill institutional voids, and establish legitimacy in local communities. These partnerships may be formal financial or contractual arrangements, informal partnerships with local community-based NGOs and social enterprises, or informal partnerships with community leaders and organizations.

Develop local capacity and train local entrepreneurs: The institutional voids in the downstream supply chain and lack of personnel to service and repair off-grid lighting products represent both a potential barrier and an opportunity. Successful off-grid solar enterprises serving the BOP provide opportunities for capacity building of individuals in the community. Training local entrepreneurs in sales, distribution, marketing, and technical support helps enterprises overcome barriers related to trust and knowledge of the product, fill institutional voids in the supply chain, and provide needed education, installation service, and after-market support.

Fill institutional voids for financing, education, product maintenance, and quality control: Key barriers to the adoption of off-grid solar lighting products are a lack of knowledge about the product; inability to finance upfront costs; concerns about product operation, installation, and maintenance; and a lack of quality control. In BOP markets, voids such as these cannot be outsourced to other entities. The enterprise itself must develop capabilities to address these barriers. Financing and capital must be provided, either through innovative models, such as the pay-as-you-go model, or more traditional options including subsidies, installment payments, and micro-loans. Similarly, the enterprise must find a way to provide education about the technology and offer some form of after-market repair and service, preferably through a trained community member or local entrepreneur. Off-grid lighting enterprises must also be active in seeking regulatory structures that will support high quality products to prevent market spoilage.

Off-grid lighting products hold enormous promise in sustainable development. However, careful attention must be paid to developing business models that meet the particular challenges of working in a BOP market and bringing a new and unfamiliar technology to remote areas.

Conclusions

This paper contributes to narrow the gap on the understanding of value streams through circular business models. By performing a literature review of the themes “circular economy” and “business model”, the circular business model concept is depicted through the linkage of themes of sustainability, circular loop, drives, barriers, and value streams.

By mapping the main high impact papers in the research fields of circular economy and business models, considering the business perspective as a background, five categories emerged: conceptual basis, objectives, drives, barriers, as well as the theoretical and practical implications for the development of CE. Based on this first step and searching to bridge the organisational strategy with the circular business model stock of knowledge, the internal deployment of steps towards a sustainable society is presented, by evidencing the dynamics within the organisational level by a business ecosystem perspective.

However, the main contribution of this paper is the proposal of a circular business model framework (CBMF) that contributes to the circular economy theory by considering the value stream dynamic amongst the different stakeholders, from the positive, negative and feedback loops interactions perspective. This allows the improvement of the assessment of positive and negative interactions in a systematic way, helping both researchers and practitioners to identify weaknesses and strengths from a value perspective. The matrix of value (Appendix 1) originated from these interactions, can be analytically used as a source to indicate “sustainable value” efforts to be incorporated in the strategy of the organisation. This evidence the necessary change of mindset from a linear to a circular value flow, which is needed to reach sustainability. Once the value stream is identified, efforts to mitigate the negative interactions in a CBM can be targeted to circumvent the challenges. Therefore, the value stream depends on the product cycle, alternatives must be found to increase perception in each cycle. The role of government policies was evidenced in several stages of the study as the catalyst that acts by mediating the paradoxical and conflicting points.

Thus, some practical implications emerge from this research. First, the mapping of dynamics in the value stream in the CBM allows driving efforts to maximise positive aspects, as well as to develop mechanisms to minimise or eliminate negative impacts and tensions. Second, the CBMF can help organisations to understand the value stream in different levels of analysis, from the organisational perspective towards the business ecosystem. This research has some limitations related to the use of search engines and the content available in the ISI Web of Science and Scopus databases, the search string, the inclusion and quality criteria adopted, and the screening process can bring subjectivity and bias to the surveyed sample.

For future research, the matrix presenting the central interactions in a circular economy perspective is suggested as helping in modelling attempts towards CBM. Further research to understand the tensions and trade-off proposed in the CBMF are needed in field research. Finally, system dynamics simulation can be applied to formulate an in-depth understanding of the interaction in the value streams.

2.1 Business model innovation (BMI)

The BM construct emerged in the 1970's and was originally associated with system modelling in information technology. Since the 1990's, the concept has been maturing, with contributions from many disciplines, including technology, organizational and strategy theories (Wirtz et al., 2016). In its modern interpretation, BM is understood as the “design or architecture of the value creation, delivery, and capture mechanisms” of a business (Teece, 2010). In other words, it explains how a business work (Magretta, 2002).

Due to its elusive nature and the comprehensiveness of its scope in the modern interpretations, linking two ‘conflicting’ domains of knowledge (the technical/physical, generally based on hard facts, and the economic, generally based in uncertain assumptions), the BM construct definition is yet imprecise and has been interpreted in different ways (Gassmann et al., 2016). In general, BM frameworks converge around the notion of a value generation logic of a reference system (e.g. organization, value chain, industry sector), which can be represented by different elements (Wirtz et al., 2016). One of the most referenced representations, the BM Canvas, considers nine building blocks for value generation, organized in four pillars: ‘product/value proposition’, ‘financial aspects’, ‘customer interface’ and ‘infrastructure management’ (Osterwalder et al., 2005). These four pillars are further refined by Richardson (2008) in three main forms of managing value: ‘value proposition’, ‘value creation and delivery’ and ‘value capture’. Such representations are related to the static view of BM.

In parallel to these studies, there is the notion of BM innovation, which consists of changing (by creating, diversifying, acquiring or transforming) BM as a response to internal and external incentives (Foss and Saebi, 2017; Geissdoerfer et al., 2018b). In this view, BM can be an (1) enabler of strategic changes in innovation processes (e.g. products/services), or (2) the source of competitive advantage acting as innovation itself (Boons et al., 2013).

The dynamic process of BMI can occur in different intensities, related to the degree of novelty introduced (i.e. ‘new to the firm’ or ‘new to the industry’) or the scope of changes (i.e. individual components or systemic/architectural structure) (Foss and Saebi, 2017). Moreover, different triggers (internal or external), such as changes in the competitive environment or legislations, can stimulate BM changes.

Recently, BMI is receiving increasing attention in specific areas (e.g. sustainability, CE, servitization, digitization). Due to the importance of these concepts in their individual investigation fields, different ‘sub-streams’ emerged (Foss and Saebi, 2017). This article explores two of these ‘sub-streams’, addressing BMI in the context of sustainability and CE.

4.1 The state of art in xEVs application

The impact of EV charging on grid depends upon load patterns of existing feeders, the state of charge in the battery, the location of charging, the capacity of the battery and charging mode. Studies carried out on EV charging stations have shown that parameters are uncertain. This makes operation and planning of distribution system complex especially with the higher level of EV penetration. Hence, stochastic models are used to take care of uncertainties related to charging load profiles, charging classes and locations. These studies have also taken into account levels of EV penetration and suitability for mobile energy system for the grid (Hoke, Brissette, Smith, Pratt, & Maksimovic, 2014; Leou, Su, & Lu, 2013).

In order to evaluate the regulation capacity (up and down both), that can be provided by vehicle to the grid system, a framework/business model has been designed by the author in Lam, Leung, and Li (2016), where aggregation of an electric vehicle was modeled with queueing network.

In Yazdani-Damavandi, Moghaddam, Haghifam, Shafie-Khah, and Catalão (2016), a multi-energy system has been proposed in the context of reserve market by accounting for it as ancillary services, which accompanying of the parking lot, and plug-in electric vehicle as huge energy storage system. The traffic uncertainty was modeled using the stochastic methodology, the finding of the results demonstrates the profitability of proposed models.

In Zhao, Member, Wan, Xu, and Member (2017), the author presented a novel optimizing technique using probabilistic criteria to participate in energy reserve market including a V2G concept based on arrival and departure pattern of EVs, the expected market price was formulated, however, the variability of available on road EVs was ignored. To improve the fuel economy, in Zhang, Xi, Langari, and Member (2017) author proposed a novel EMS in an electric vehicle by forecasting the velocity using chaining neural network. The velocity was forecasted at different time schedule based on the information obtained through V2 V and V2I communication channels. However, the bi-directional energy flow system was considered. In Korolko, Sahinoglu, and Member (2017), a novel efficient cutting plane method based on robust optimization has been developed for a single as well as multiple EVs charging optimization in the unregulated electricity market, the analysis was discussed for both scenario i.e. certain and uncertain energy price profile. However, the modeling of multiple load or generation in objective function was ignored. In Member (2017) author presented a novel cost constrained EV charging strategy based on moving horizon optimization technique with two objective minimizations of charging cost in customer perspective while balancing the grid frequency in perspective of power system operator. Further, the two price structure was analyzed to study the optimal combination in respect of customer behavior. However, the uncertainty associated with the arrival and departure pattern of EVs was not considered.

In Mukherjee and Gupta (2017), author solved a presented bi-objective framework using online and offline distributed algorithm to maximize the EV aggregator profit by charging the maximum number of EVs under the influence of multiple aggregator availabilities. However, the uncertainty relates to the charging price and no of EVs was considered. In Zhang, Member, Hu, Xu, and Member (2017) to determine the V2G available capacity a heuristic smart charging strategy has been designed based on proposed aggregator model under the energy and power constrained. The designed constraint enable the high accuracy forecasting of arrival and departure pattern of the EVs to charge and discharge the battery. However, the formulated model does not consider the EVs type variability with different battery capacity. In Yuan, Huang, Jun, Zhang, and Member (2017), the author presented a framework based on a multileader–multifollower Stackelberg game model to maximize the charging station aggregator’s profit. The proposed framework considered the price declared by other charging station in stage 1 and the charging station selection based on the waiting time, distance and charging stations declared price by the EVs owner in stage 2. In Neyestani, Damavandi, Shafie-khah, Bakirtzis, and Catal (2017) a bi-level framework has been presented using duality theorem to maximize the EV aggregator’s profit by interacting in energy market and the parking lot owner’s profit was maximized considering the EVs owner preferences, the uncertainty of the EVs arrival and departure at parking lot was modelled in the main objective function however the uncertainty of the market price variation was ignored.

4.3 CE & supporting business models

The inability of prevalent linear economic models to manage the current sustainability issues has led to the development of new business models based on CE philosophy (Gorissen et al., 2016; Goyal et al., 2018). Nuβholz (2017) defined circular business model (CBM) as “how a company creates, captures, and delivers value with the value creation logic designed to improve resource efficiency through contributing to extending useful life of products and parts (e.g., through long-life design, repair and remanufacturing) and closing material loops” (p.12). Linder and Williander (2017) further described the conceptual logic of creation logic in CBM as “utilizing the economic value retained in products after use in the production of new offerings” (p. 2).

Several researchers have contributed to the development of CBMs. Roos (2014) outlined the process of CBM development and proposed specific questions for creating an appropriate business model for a circular value chain. Lüdeke-Freund et al. (2018) performed a morphological analysis of 26 CBMs from literature to be able to identify a broad range of business model design options and proposed six major CBM patterns of closing resource loops. Bocken et al. (2017); Bocken et al. (2018) provide in-depth insights on how established businesses might pursue business model experimentation for sustainability and circularity goals.

Various business model frameworks have also been proposed in the extant literature. Lewandowski (2016) modified the traditional business model canvas and further included take-back systems and adoption factors to develop an extended framework for designing business models for CE. Mendoza et al. (2017) proposed a novel, ‘backcasting and eco-design for the circular economy’ (BECE) framework aimed at helping companies to develop sustainable business models that translate CE principles into industrial practices. The BECE framework has proven equally successfully in a product as well as service-oriented business applications (Heyes et al., 2018). Urbinati et al. (2017) proposed a taxonomy of CE business models to distinguish how some companies have implemented cost efficiency improvements in their adoption of CE. Their CE business model canvas framework introduced adoption of circularity along two dimensions: customer value proposition & interface (value proposition to customers) and value network (interaction with suppliers and restructuring internal activities). Recently, an environmental value propositions table (EVPT) and a step-by-step evaluation approach of CE business models were developed by Manninen et al. (2018).

van Loon et al. (2017) provide an empirical evidence of the total cost of ownership for consumers and profitability for manufacturers in CBMs. Their study results provide interesting insights for firms wanting to make a transition from selling to leasing products in the presence of an effective second-hand market structure. However, it is important to note that moving from ownership to services (for example leasing) does not automatically contribute to environmental rents unless consumption patterns change accordingly (Junnila et al., 2018). For example, access-based services for cars are more successful when compared to smartphones where such models have largely failed (Hobson et al., 2018; Poppelaars et al., 2018). Lieder et al. (2018) present another example of customer preferences and acceptance of circular business model (pay per use washing machines) in Sweden.

In addition, many studies have identified and discussed the role of various drivers/enablers (Rizos et al., 2016; Mativenga et al., 2017; Veleva and Bodkin, 2017) as important factors for successful implementation of CBMs while others have identified barriers (Rizos et al., 2016; Linder and Williander, 2017; Spring and Araujo, 2017; Oghazi and Mostaghel, 2018; Singh and Giacosa, 2018; Sousa-Zomer et al., 2018b; Whalen et al., 2018) hindering the implementation of CBMs.

Product-Service Systems (PSS) represent a hybrid class of business model for CE (Vasantha et al., 2015). A PSS “consists of tangible products and intangible services designed and combined so that they are jointly capable of fulfilling specific needs of customers” (Tukker, 2015, p. 81). The PSSs exemplify a range of business models from being ‘product orientated with a few extra services included’ to more ‘result-oriented’ services with no predetermined product involved (Hobson, 2016; Yang et al., 2018). Pialot et al. (2017) further expanded the scope of PSS by proposing “Upgradable Product Service System (Up-PSS)”. Up-PSS combines the upgradability concept with optimized maintenance, EoL management and the servitization of the offer. Product upgradability in a PSS context is further Khan et al. (2018) explained in the review paper. However, According to Kjaer et al. (2018) PSS does not automatically lead to achieving CE's vision of resource decoupling, i.e. decoupling economic growth from resource consumption. It only happens when there is a decrease in resource usage irrespective of the growth rate of the economic driver.

Overall, CBMs including PSSs promise significant cost savings and radical reductions in environmental impacts (Linder and Williander, 2017) in addition to improved entrepreneurial opportunities for services connected to products involving both forward and reverse supply chains (Spring and Araujo, 2017).

5 Potential directions for future research

This contribution provides an overview of the literature on electric vehicle business models. It leads to recommendations that can be considered in future research work. To our view, future research should have a holistic view on business models, since the consideration of isolated elements can lead to local optimization, while ignoring relevant tradeoffs such as value capture vs. value creation or value proposition vs. value capture. In addition, the business model framework we used for the literature analysis includes value communication, an element that has not been considered in many previous business model conceptualizations. Most business models definitions rather include value proposition, creation, delivery, and capture. This review, however, provides evidence that value communication is an important aspect that has been addressed by a fair body of research and that success or failure of the EV business models depends on how this element harmonizes with the other business model elements.

A relevant question should be asked, however: What role does scientific research play in the development and improvement of business models in electric mobility? (1) Is it ex post research, meaning that business models are analyzed after implementation, in other words, identification of the patterns of successful business models? (2) Or is it ex ante research, in the sense that it provides sound and scientifically supported methodologies for the development of appropriate business models for electric vehicles. In the second case, research can be more effective in framing and impacting electric vehicle business models that are rolled out in practice. We believe that business model research will benefit from both approaches. The first approach investigates the contingency factors such as customer segments and preferences, product attributes, and pricing decisions, under which certain EV business models are more successful than others. The second approach is more focused on the development of methods and tools that support companies in creating new innovative business models. Whereas the first approach is more common in management and business administration literature, the second is more popular in engineering and design fields. Both are complementary and support the development of EV business models. EV business model research can be supported by elaborating an extensive cross-country database of EV business models that can be extended and analyzed over time. Comparative studies between different countries can be helpful in identifying what business models are more likely to thrive in one country or another. For example, Norway has an initial situation that is completely different from most countries in Europe because of the wide diffusion of electric cars. In addition, subtle differences between countries such as the percentage of households that have a garage available can have an important impact on business models for charging infrastructure. Obviously, the availability of a garage reduces the need for charging stations in parking facilities.

Arend (2013, p. 399) asserts that “one has to move from the business model idea's focus on the practical realities to an alternative focus on what is possible in the future (although there remains some catching up to do to what is already existing).” This is particularly true for electric mobility in conjunction with digitalization. Digitalization significantly expands our possibilities for the creation of new business models. Accordingly, a wide variety of conceivable services can be created and launched to support the transition to electric vehicles. Therefore, more conceptual research is required to expand our view on how to leverage digitalization capabilities for the generation of new digital value propositions and new ways of digital value creation. Information technology and information systems' researchers that do business model research can study and uncover the potential of digitalization in creating new electric vehicle business models.

Whereas most articles focus on the technology or actors involved in electric vehicles, only a small portion (12 percent) concentrates on charging infrastructure. Because the charging infrastructure is a crucial element for a functioning electric mobility system, certain questions still have to be answered. For example, who should take the responsibility for charging infrastructure in public space, public and private institutions? And most critical, how can companies justify the investments for charging infrastructure? How can the value proposition of actors in the charging value chain be expanded to embrace new services and offerings that add value to the customers and generate profits? Here, research can contribute through future studies and Delphi-method-based research to capture latent knowledge of practitioners and technologists and then aggregate this knowledge into innovative business model options. In addition, capturing use cases that work well in different countries can expand the knowledge database and facilitate cross-regional knowledge transfer.

Regarding the business model elements, there is a lack of research on value capture of business models for electric vehicles, more specifically, in the electricity, automotive, and charging value chains. The major question is how to make a business model economically viable, while offering a competitive product to the consumer. The convergence of these value chains might trigger new perspectives, leading to new ways for capturing value. Business model simulations, can provide valuable support in this regard by revealing the effects of the business model changes on company's value chain performance (Täuscher and Abdelkafi, 2018). Furthermore, innovative financing models can make electric vehicles more attractive to customers and the expansion of charging infrastructure more appealing to interested entrepreneurs.

In the future, business models related to fuel cell electric vehicles (FCEV) should receive more attention in research. In our sample, only some contributions mentioned this technology as part of a holistic view of electric mobility (Bohnsack et al., 2014; Harrison et al., 2018; Rudolph, 2016). While few car manufacturers push the market diffusion of FCEV, research considers FCEV business models only incidentally. The discussion of FCEV is, indeed, very controverse (Ball and Weeda, 2015; Cano et al., 2018). It is not easy to predict the future role of the fuel cell in the automotive industry. Recently, Volkswagen has claimed that FCEVs are not interesting for passenger vehicles. Some Asian (and also German) manufacturers are, however, making progress in this technology. Some observers even predict that FCEV will be the next widely diffused technology in the car industry. Toyota, for example, is allocating a lot of R&D efforts in FCEVs (Ball and Weeda, 2015). Very important, however, is that technology and business models go hand in hand. Some technologies—as shown by many examples in the past—are not successful, until entrepreneurs discover new business models that support the diffusion of the technology. Conceptual research as well as exploratory future-oriented studies that analyze various evolutionary paths of the different mobility technologies with the business model as a unit of analysis, could provide significant insights into future mobility as well as strategic moves of automotive manufacturers and supply chains in competition.