A taxonomy of circular economy implementation strategies for manufacturing firms: Analysis of 391 cradle-to-cradle products.

Abstract Given the complexity of circular economy implementation, the literature is missing a strategic standpoint. This paper investigates the taxonomy of circular economy implementation strategies at the managerial level by linking it to strategy literature. The taxonomy was developed by using standard k-mean clustering method that incorporates 391 Cradle-to-Cradle product scorecards of 187 companies from 10 different industries. The analysis was based on the relative importance assigned to each competitive capability that defines the circular economy; namely, material health, material reutilization, renewable energy, water stewardship, and social fairness. Three distinct clusters of circular economy implementation strategy groups were observed: (i) founding (recyclers), (ii) development (all-decent circulars), and (iii) maturity (toxicity fighters). All clusters have been present in various industries, although there is an industry effect. The results indicate that each cluster has a different strategy. The results obtained contradict the general assumption and expectation of simultaneous improvement at all circular economy dimensions. Our research contributes to the theoretical understanding of circular economy implementation by providing a taxonomy of strategies. It contributes to the strategy literature by suggesting that the maturity degree of a competitive capability may determine the implementation strategy. For practice, the study presents a road-map for managers to reach higher degrees of circularity. Highlights • Links circular economy literature to strategy literature. • Employs hierarchical k-means clustering method to analyze 391 Cradle-to-Cradle products. • Proposes a taxonomy with three degrees of circularity adopting different strategies. • Suggests that the maturity degree of a competitive capability may determine the strategy. • Contributes to the theoretical understanding of circular economy implementation in the manufacturing industry. [ABSTRACT FROM AUTHOR]