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The transition towards a circular economy- An explorative research into potential revenue models in the construction industry from the perspective of the manufacturer and supplier

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Version: 1.0

Last Updated: 1-2018

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Due to environmental issues, the linear economy seems to come to an end. Solutions can be found in a circular economy, which is also the case for the construction industry. The construction industry is worldwide the largest consumer of raw materials and the demand for raw materials in general and building materials in particular increases. In order to implement
the concept of a circular economy in the construction industry, this research aims for finding suitable revenue models for products in the construction industry considering the different lifespans from the view of manufacturers and suppliers. To reach this, the theoretical models
of Tukker (2004) and Lacy & Rutqvist (2015) are plotted against each other and resulted in 13 business models. Thereafter, 11 revenue models were selected based on literature or the application of these models. A broad literature study, an online-survey with 68 respondents and 4 expert interviews were used to analyze the relations between the selected business
models, revenue models and products (divided into product groups) as well as the future potential of the models. Based on this analysis, it is found that manufactures and suppliers are not yet ready to stay the owner of the product the entire life. The traditional business and revenue models are still seen as models with high future potential. A slight shift is found in
the behavior of the construction industry towards the functional result business model. For products with a long lifespan (product group structure or skin), the revenue models without ownership seems most suitable. For products with a shorter lifespan (product group services or space plan) other revenue models like functional rent, operational lease, pay-per-use or
lifetime extension model seems more suitable.

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