Value Chain Analysis in the Circular Economy

Week 2 of the Global Retail Challenge

This is the second in a series of updates from the 2019 Global Retail Challenge, a seven-week design thinking case competition featuring student teams from around the world. Learn more here.

This week our GRC student teams tackled a Value Chain Analysis, designed to help the them identify the major players and key activities that contribute value to the creation of their chosen product or service category. This exercise gave students the opportunity to consider who holds bargaining power and influence in a circular system. They discovered that some players drive performance, some players are vulnerable to substitution, and some players are in a position to increase power. Understanding the value chain helped them better understand the capabilities, vulnerabilities, opportunities and gaps that currently exist in the system.

 

Screenshot of Darien Sturges, Strategic Partnerships, Ellen MacArthur Foundation during the Workshop on October 9, 2019

Darien Sturges, Strategic Partnerships, Ellen MacArthur Foundation, and Susan Long, Sustainability Initiative Manager for REI Co-op facilitated a wonderful feedback and Q&A session on the student’s Week 2 assignments. In addition to direct feedback on their individual assignments, the students discussed the debate in circular economy circles over whether the most powerful player to influence in a system is the product manufacturer or the customer. Darien shared his point of view that the most important players to influence are product manufacturers, although he admitted there is still healthy debate on this topic within the industry. We also discussed the value of incremental circular solutions to spark change as equally important as large-scale solutions. Hidden opportunities for change exist in unexpected places which can be the catalyst for larger systems change in the future.

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