Hello viewers welcome to Info Thirst today we are going to talk about a types of economy which can benefit each and every one of us. Before we get into the topic we would like you to Follow us by clicking the follow button. Now that you have done that...So let's dive into it…
To understand the circular economy, you 1st need to understand linear economy. Let's say Ikea sells Mr. X a table, Mr. X uses that table for several years and then dispose it. This example explains us the working model of linear economy, which is TAKE - MAKE - DISPOSE. The assumption in this economy is that, we have unlimited resources, but we all know that's not true.
The company take resources and raw material - make the product and we use it - then we dispose it. Now here the company goal is to but resources and raw material for the lowest cost possible and sell as many as possible. Where as our goal is to find the perfect product and dispose it but question arises is who is responsible for the products after that and were do they end up.
Circular economy model works assuming the resources are finite. In circular economy not only a company maintains the ownership of products but also recycle them. Let's say Ikea give Mr. X a table on lease, Mr. X uses that table for several years and then return it back to Ikea. This example explains us the working model of linear economy, which is MAKE - USE - RETURN.
Now in this model companies are not selling products they are selling a service which means long the life of service results in more profit for company. Now there companies which follow circular model but only in certain region and aims to adapt 100% circular model. Best example is NIKE, they run 'NIKE'S REUSE-A-SHOE PROGRAM' in USA but not yet available in INDIA.
Now If this model is so useful and everybody is enjoying benefit, why every one is not shifting towards this model ?
The answer is cost, every company have their own supply which needs to be redesign when they shift, which comes at a price.
Another answer is behavior of consumer. It take time for consumer to adapt new things and when they finally accept the change then an idea becomes reality in business.
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