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Circular Economy: Business Benefits and Impact

   

Added on  2020-03-16

10 Pages2288 Words52 Views
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CIRCULAR ECONOMY1Circular economyBy[Student’s name]CourseInstitutionDate
Circular Economy: Business Benefits and Impact_1

CIRCULAR ECONOMY2Table of ContentsIntroduction......................................................................................................................................3Benefits of the circular economy.....................................................................................................3The circular economy in the manufacturing sector.........................................................................5Competitive advantage....................................................................................................................7Recommendations............................................................................................................................7Conclusion.......................................................................................................................................8References........................................................................................................................................9
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CIRCULAR ECONOMY3IntroductionProduction of products by various companies requires the use of resources. Due to continuous use, the resources become scarce, and they may even be depleted. This continuous use of resources has led to the prices of the raw material required for production to go up leading to increased cost of production. This forces company to set high prices for their products to break even and generate profit for the company. This sustainability issue has forced companies to engage into the circular economy to continue their operations. Circular economy refers to a practice where resources are kept useful for a long period, extracting the maximum value from the resources and then at the end of the life cycle, the products are recycled to generate other products and the cycle continues (Wu, et al.2014, p.169). This report is written to explain the importance of the circular economy and how companies can adopt circular economy practices to create a competitive advantage.Benefits of the circular economy.Creation of competitive advantage.Recycling and reuse will enable a company to be able to save on the cost of purchasing raw materials and resources each time it wants to produce a product. The company will reuse the parts of the existing product to make another product and this will reduce the costs associated with procurement processes (Liu, and Bai, 2014, p.148). This will result in a reduced cost of production which will enable the company to offer products to their customers at a reduced price than their competitors. This will help to attract more customers as more customers will be willingand able to purchase the high quality products being sold at lower price. This will enable the company to generate more revenues and improve their profits and create more value for the stakeholders and also reduce competition.
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