A growing trend in the world of business is the move away from traditional business models into circular business models.
What are Traditional Business Models (TBMs)?
Traditional Business Models (TBMs) focus on single-use resources and products which are then discarded as waste.
Traditional Business Models (TBMs), also known as Linear Business Models (LBMs), focus on producing, selling, using and throwing away products. Because these models do not consider long-term environmental impacts of business activities, they do not bother with what happens to the products after being consumed, how the packaging is disposed of, etc.
Traditional Business Models (TBMs) are only concerned about the financial costs of using resources in the production process, and focus on revenues, costs and profits. Customers create a disposable society by replacing products earlier than their expected life cycle simply because they are no longer interested in them rather than the actual need to change.
In Traditional Business Models (CBMs) businesses do not aim to thrive in a sustainable way but depend on finding and extracting new, finite and non-renewable resources. By using non-renewable resources instead of renewable ones, businesses can keep their costs of production at the low level in the short term.
Case Study 1: The amount of waste from a single meal at McDonald’s is significant and include the paper mat, food wrappings, straws, paper cups, plastic paper cup lid, several tissues, sauce wrappers, etc.
Case Study 2: Unlike glass, plastic bottles used in the production of beverages such as beer, soft drinks water and wine are not being reused. Beverage companies such as Pepsi and Coca-Cola continue to use plastics which are cheaper than glass bottles, so they can generate a profit for shareholders.
Traditional Business Models (TBMs) rely on cradle to grave design and manufacturing.
What is cradle to grave design and manufacturing?
Cradle to grave refers to unsustainable model of production based on one-time use of resources which is currently still the most common form of manufacturing products.
Cradle to grave is a linear approach to product lifecycle management that focuses on minimizing the environmental impact of a product during its use phase. It does not consider the environmental impacts of the product’s extraction, production, or disposal.
The linear approach to product lifecycle management is a sequential process that involves the following stages:
- Concept development. This stage involves generating ideas for new products and services.
- Design. This stage involves creating detailed specifications for the product or service.
- Development. This stage involves creating the product or service.
- Launch. This stage involves introducing the product or service to the market.
- Growth. This stage involves increasing sales and market share.
- Maturity. This stage involves maintaining sales and market share.
- Decline. This stage involves sales and market share declining.
- Disposal. This stage involves disposing of the product or service.
Advantages of Traditional Business Models (TBMs)
Advantages of using Traditional Business Models (TBMs) include:
- Are more cost-structured and predictable. The traditional business model which relies on producing, selling, using and throwing away is often significantly cheaper for a business than adopting a circular business model.
- Can help to ensure products are developed on time and within budget. Consumers do not need to forego product quality and performance in the short-run for environmental sustainability in the long run.
- Can help to identify and mitigate risks early in the development process.
Disadvantages of Traditional Business Models (TBMs)
Disadvantages of using Traditional Business Models (TBMs) include:
- Can be inflexible and make it difficult to adapt to changes in the market.
- Does not take into account the environmental impacts of the product throughout its lifecycle. Protecting the natural environment and ecosystems that we all rely on by becoming environmentally friendly is not in the interest of businesses using traditional approach to manufacturing.
- Can lead to the development of products that are not as well-suited to customer needs.
The linear approach to product lifecycle management is a traditional approach that has been used for many years. It is a structured approach that can help to ensure that products are developed and launched on time and within budget. However, the linear approach can also be inflexible and can make it difficult to adapt to changes in the market.
