The vast and pressing environmental and societal challenges, as well as the difficulty of the path to sustainability, are substantially challenging retailers’ business models (BM hereafter). Researchers have yet to answer how retailers cope with different kinds of tensions in their process of BM innovation for sustainability. Drawing on a longitudinal, seven-year, inductive, multiple case study of three European retailers that decided explicitly to move toward sustainability, this research highlights different tensions that confront retailers in this process and the decisions they take to resolve them. Three stages are identified as necessary to implement a BM for sustainability in retailing.
In a first stage, patching sustainability initiatives onto traditional BM creates tensions, only some of which can be resolved by middle managers in their day-to-day activities. Others persist and represent paradoxical tensions. In a second stage, formal engagement by owners and senior to change the core of traditional BM can resolve paradoxes, by allowing for strategic actions at the ecosystem level. In the third stage, ecosystem-level actions involve renewing relationships with traditional stakeholders and initiating new relationships with new ones to implement the BM for sustainability. Moreover, a specific feature of BM innovation for sustainability in retailing is that stores can take major roles in the ecosystem, functioning as local hubs for circularity.
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