[MUSIC] Businesses must listen to the customers, legislators, and business forces that strive for sustainable solutions. If they want to successfully adapt to a business context reshape by sustainability. Understanding the shift in preferences and how offerings are perceived is key. Therefore, in this chapter, we will focus on the logic behind various circular offerings and the changes B2B companies need to make in order to drive the market and meet the new market and expected values. This is based on the research from temporary University LUT in Lappeenranta, and RMIT in Melbourne. First, let us discuss what we mean by value. Traditionally we talk about economic and monetary values in business. However, circular value has expanded the scope. Both environmental and social drives have become important, and the need for offering is based on the logics of resurrecting, sharing, optimizing or replacing has taken over. In the quest for meeting new sustainable demands, the value is not only met by products or service offerings. But also where the process and the business model its structure becomes temporal in order to meet up to the expected values in a circular economy market. We have previously talked about the resolve framework as drivers to find new solutions. We are now focusing on the logics of circular business offerings and actually identifies four types of value creation logics. Its first resurrecting value, sharing value, optimizing value, and replacing value. First, what do we do when we resurrect value? When we resurrect value, we focus on how we can close circular loops by converting waste into resources. This often results in a modest, mainly product-focused innovation which aim to prolong the value of a certain product. To leverage the resurrect value, the supplier must be able to generate the value of used and usually worthless resources cost efficiently. Typical examples of this process are biodiesel production from bio waste, recycled plastic products or refurbished furniture. The value for the customer is often an equal quality product for a lower price, with more efficient resource usage and with recycling. Second, what do we mean by sharing value? Sharing economy is emerging in various areas. And as a result, customers are more interested in what they can use the product for than the product itself. In other words, the drill doesn't have a value on its own. The hole that we can make by using the this tool makes it valuable for us. From a sustainable perspective, the basic idea is to increase the utilization of a product or service instead of producing new products up to the point when accessing the value of the product becomes more important than the ownership of the product. This actually requires more focus on services and business models. To leverage on the service value logic, the supplier must be able to enable B2B customers to move from ownership. To use the shared resources in practice through delivering resources to the right place at the right time, through services, or faciliting customers to exchange resources through a platform. Access becomes more important as new sharing solution and new services develop. Many customers start to create peer-to-peer common pool resources and systems for sharing. For example, mobile and transportation, ride sharing, ride sourcing, vehicle sharing, spaces both accommodation and workplaces, storage, personal services and professional services, financing. In example crowdfunding, money lending insurance, health both in medical services and equipment, utilities, both in energy and telecommunications. These solutions are based on opportunities technology provides. Mainly by matching buyers and selling, optimizing the utilization and verifying trust on the platform. By making sure transacting partners limit the counterparty verification and liability expenses while reaping the benefits of sharing. Now let's move on to our third logic, optimizing value. This basically focus on the customer processes and the value created in them. It requires deep knowledge about how the product is used and how the under-utilization of resources in a value chain or value system can be optimized. From a company perspective, you have to be able to demonstrate how the customer can get more value from a resource. In terms of circularity, this logic aims to generate value primarily by narrowing resource flows, improving the efficiency, and output from a specific resource. This requires a shift from a traditional product delivery perspective to service oriented offering. For example, combining oil changes and analytics into oil as a service, and offering can optimize oil management for vehicles and power plants. When optimizing flows, the value chain or value system companies can take on new types of risks, which might lead to the need to develop new business models that support the offering. Finally, let's see what product can do when we replace value. The replacement of one product value to another product value is rather traditional choice. As we all know, innovation can support longer life cycles and extended utilization. In order to gain the acceptance of the replacement in a B2B context, there is a need to have a profound understanding of the implications of various resources usage and materials in the customer's processes. We also need to acknowledge their impact on sustainability. To summarize, if we want to create new types of values, we can resurrect value by focusing on the product and processes to close resource loops. We can share value by focusing on digital supported services and alternative business models that increase utilization. We can optimize value by focusing on flows and processes and on alternative business models that optimize resource usage. And finally, we can replace value by shifting our focus and support the usage of more sustainable materials, components, and products. [MUSIC] >> I think the, in the sustainability world for me as I could say like a practitioner in this field, you really must look at opportunity and risk together. It can't be one or another. I still see far too many ESG managers or investment firms going down the path of risk prevention and just looking at things like do you invest in tobacco alcohol or firearms or human rights? And all those issues super important. I'm right there with them but I always tried in my role to show that there's good governance in place and accountability. These are like the basics of sustainability for me. [MUSIC]
