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Product Life Extension: A Quantitative Analysis of Economic Value Retention in a Circular Economy Business Model

Nordström, Elsa LU (2024) EKHS35 20241
Department of Economic History
Abstract
This study investigates the creation of economic value within the Product Life Extension (PLE) business model, focusing on how specific product categories and characteristics impact the retention of value and revenue streams of PLE firms. Using Godsinlösen AB as a case study, the research quantitatively examines sales data to explore the retention of product value and consumer preferences for reused goods by examining the relationship between original price and resell price as well as stock turnover. Key findings reveal that themes such as durability, quality, and functionality, along with market characteristics, may influence value retention. Products such as IT & electronics, and furniture & interior items show varying degrees of value... (More)
This study investigates the creation of economic value within the Product Life Extension (PLE) business model, focusing on how specific product categories and characteristics impact the retention of value and revenue streams of PLE firms. Using Godsinlösen AB as a case study, the research quantitatively examines sales data to explore the retention of product value and consumer preferences for reused goods by examining the relationship between original price and resell price as well as stock turnover. Key findings reveal that themes such as durability, quality, and functionality, along with market characteristics, may influence value retention. Products such as IT & electronics, and furniture & interior items show varying degrees of value retention and stock turnover, with electronics seemingly experiencing rapid depreciation likely due to market dynamics and consumer preferences. In contrast, furniture & interior items seem to retain value better and sell faster, probably due to slower market changes and more durable designs. Given that different product categories experience varying levels of economic value retention, it is important for firms within this model to target products with higher embedded value or potential for value addition to achieve profitability and foster sustainable growth in the circular economy. To further explore this topic, additional research should be conducted on other product categories and specific types of products in detail, preferably over time for additional firms, to obtain more generalizable results. (Less)
Please use this url to cite or link to this publication:
author
Nordström, Elsa LU
supervisor
organization
course
EKHS35 20241
year
type
H2 - Master's Degree (Two Years)
subject
language
English
id
9169930
date added to LUP
2024-07-12 11:10:25
date last changed
2024-07-12 11:10:25
@misc{9169930,
  abstract     = {{This study investigates the creation of economic value within the Product Life Extension (PLE) business model, focusing on how specific product categories and characteristics impact the retention of value and revenue streams of PLE firms. Using Godsinlösen AB as a case study, the research quantitatively examines sales data to explore the retention of product value and consumer preferences for reused goods by examining the relationship between original price and resell price as well as stock turnover. Key findings reveal that themes such as durability, quality, and functionality, along with market characteristics, may influence value retention. Products such as IT & electronics, and furniture & interior items show varying degrees of value retention and stock turnover, with electronics seemingly experiencing rapid depreciation likely due to market dynamics and consumer preferences. In contrast, furniture & interior items seem to retain value better and sell faster, probably due to slower market changes and more durable designs. Given that different product categories experience varying levels of economic value retention, it is important for firms within this model to target products with higher embedded value or potential for value addition to achieve profitability and foster sustainable growth in the circular economy. To further explore this topic, additional research should be conducted on other product categories and specific types of products in detail, preferably over time for additional firms, to obtain more generalizable results.}},
  author       = {{Nordström, Elsa}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Product Life Extension: A Quantitative Analysis of Economic Value Retention in a Circular Economy Business Model}},
  year         = {{2024}},
}