Dynamic capabilities for the scaling of circular business model initiatives in the fashion industry

The scaling of circular business models (CBMs) plays a decisive role in the transformation toward more sustainable business practices. The purpose of this paper is to explore the microfoundations of dynamic capabilities (DCs) involved in the scaling of CBM initiatives. Based on semi-structured, in-depth interviews with 12 Swedish retail fashion companies, this research outlines a variety of microfoundations involved in CBM scaling practices. The Swedish fashion sector offers a rich empirical basis for further exploration of the microfoundations required for the scaling of CBMs. The study is theoretically grounded in a combination of the three DC classes of sensing, seizing, and reconfiguring, and the three scaling logics of scaling out, scaling up, and scaling deep. This combination provides several new insights with respect to the expansion and growth of CBMs. In particular, the research emphasizes the actual activities and processes involved in efforts toward the scaling of CBM initiatives, which have so far only been researched to a minor extent. Furthermore, the application of different scaling logics offers clarity and a constructive understanding of how circular business practices can be scaled beyond the individual firm or CBM initiative. For practitioners, the combination of DC classes and scaling logics into a 3 × 3 matrix offers a tool for the identification, understanding, and organization of the dynamic capabilities required for different scaling logics of CBMs.Funding: Jan Wallander and Tom Hedelius Foundation, Sweden