Развитие устойчивой бизнес модели для стартапов индустрии моды: ключевые факторы успеха / Development of sustainable business model: critical success factors
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ABSTRACT 3
АННОТАЦИЯ 4
Introduction 6
1.1. Problem Background 6
1.2. Research Relevance 8
1.3. Research Questions & purpose 10
1.4. Research Gap 11
1.5. Focus & Delimitations 11
Chapter 2. Theoretical Background 12
2.1. Start-ups&Sustainable entrepreneurship 12
2.2. Business model theory 13
2.3. Sustainability & sustainable development of the fashion industry 15
2.4. Sustainable business model 18
2.5. Theoretical framework of sustainable business model 20
2.6. Influence the fashion industry on the environment 23
Chapter 3. Methodology 26
3.1. Qualitative research methods 26
3.2. Qualitative content analysis 27
3.3. Case theory 27
3.4. In-depth interview design & guide 27
3.5. Research design 28
3.6. Data collectionmethod 28
Chapter 4. Empirical analysis & results 29
4.1. Content Analysis 29
4.1.1. The start-ups building a circular fashion industry 29
4.1.2. The successful sustainable fashion brands 37
4.2. Case study 45
4.2.1. Overview of the interviewed start-ups: 45
4.2.2. Data analysis 47
4.2.3. Critical factors of success of creating and implementing SMB for fashion start-ups: 50
4.2.4. Challenges of creating and implementing SMB for fashion start-ups: 52
Chapter 5. Conclusion 53
5.1. Discussion of the findings 53
5.2. Theoretical Implications 55
5.3. Practical Implications 55
5.4. Limitations 56
5.5. General conclusion 56
References: 58
Appendix A 63
АННОТАЦИЯ 4
Introduction 6
1.1. Problem Background 6
1.2. Research Relevance 8
1.3. Research Questions & purpose 10
1.4. Research Gap 11
1.5. Focus & Delimitations 11
Chapter 2. Theoretical Background 12
2.1. Start-ups&Sustainable entrepreneurship 12
2.2. Business model theory 13
2.3. Sustainability & sustainable development of the fashion industry 15
2.4. Sustainable business model 18
2.5. Theoretical framework of sustainable business model 20
2.6. Influence the fashion industry on the environment 23
Chapter 3. Methodology 26
3.1. Qualitative research methods 26
3.2. Qualitative content analysis 27
3.3. Case theory 27
3.4. In-depth interview design & guide 27
3.5. Research design 28
3.6. Data collectionmethod 28
Chapter 4. Empirical analysis & results 29
4.1. Content Analysis 29
4.1.1. The start-ups building a circular fashion industry 29
4.1.2. The successful sustainable fashion brands 37
4.2. Case study 45
4.2.1. Overview of the interviewed start-ups: 45
4.2.2. Data analysis 47
4.2.3. Critical factors of success of creating and implementing SMB for fashion start-ups: 50
4.2.4. Challenges of creating and implementing SMB for fashion start-ups: 52
Chapter 5. Conclusion 53
5.1. Discussion of the findings 53
5.2. Theoretical Implications 55
5.3. Practical Implications 55
5.4. Limitations 56
5.5. General conclusion 56
References: 58
Appendix A 63
The fashion industry is one of the most important industries of the world economy and also contributes seriously to the world gross domestic product (GDP). Moreover, this industry plays no small role in the development, production, and sale of clothing and closet items, covering various sectors: production of raw materials, manufacture of fashionable clothes and garments by designers, commercialization, and marketing communications.
In the past producing of the clothes required much less amounts of energy and water, the textile and apparel industry contributed lowly to pollution. For example, our grandparents had 5 times less clothes than the current generation. Why is this phenomenon appeared? The main reasons are the availability of the clothes and the cheaper prices. Consequently, this drops over the last 20 years has allowed customers to buy more and more clothes. The lifecycle of these clothes is short and now can be described as “take, make, waste”(Ikram, 2022). In high-income countries the principal of the fast fashion industry for clothing, footwear and upholstered furniture works in the way of buying, discarding, and replacing with new fashions, which will be soon discarded and replaced (How fast fashion can cut its staggering environmental impact, 2022). Moreover, the product varieties are diverse, demand is unpredictable and volatile, and supply chains are long and rigid. In the one point of view the cheap clothes make the variety of the products, which are available fro everyone. However, on the other side it could be possible only by decreasing the production costs that involves health issues, planet, and garment workers’ lives.
Washing clothes results in 50 billion plastic bottles with microfibers being thrown away every year. 60% of clothing items are made of a plastic material - polyester, which does not degrade in the ocean and emits almost three times as much CO2 as cotton. Fast fashion leads to people wearing the clothes they buy a couple of times and then throwing them away, which causes undesirable environmental and social damage.
According to Soil Association (SA) research, non-organic cotton contains toxic chemicals including heavy metals, formaldehyde and aromatic solvents (Organic Cotton, n.d.). Moreover, 30% of the world's cotton has been genetically modified. Companies are also trying to reduce production costs through low wages for workers, thereby reducing the cost of their product, and this is a major contributor to environmental pollution. However, due to the introduction of innovative technologies, the situation is undergoing a positive change. Namely the introduction of technologies for recycling, disposal or reuse of textile fibers which can be used for recycling. In the fashion industry, there is a huge potential for the introduction of innovative technologies at all stages to contribute to the development of the "circular & green" economy.
Due to their complexity and interdependency, fashion supply chains require a change from the “take, make, waste” principle to a more sustainable approach.
Nowadays there is a big problem of the environmental pollution and one of the main reasons for this is the impact of the fashion industry. The strong negative influence on the nature drives to serious consequences on the planet. The question is how to deal with this current problem? To reduce this impact the need to change its mechanisms and operational modes substantially has appeared.
Due to the study of Climate Seed it is known that fashion is responsible for 10% of the global greenhouse gas emissions. This indicator is quite higher than the consequences of all international flights and maritime shipping combined. Moreover, fashion influence environment in terms of CO2, is responsible for 35% of emissions of plastic to the oceans and for 20% of the industrial water pollution.
The extremely high demand of the clothes productions drives to the harmful environmental impact. Now the productions rates are much greater than ever, and it called “fast fashion”. For better understanding it means the production of the cheap and low-quality clothes for the short period of time. Therefore, this kind of production increase the demand of new collections every six months and products. Because of this fact brands use non-eco materials and it increases the waste of production and retail.
In the result the thousands of the unsold clothes yearly throwed away. That means fashion industry need to change their system to decrease its influence on the environment and choose the direction of the sustainable development (ClimateSeed, 2021).
In the fashion industry there is a concept of "high fashion" and "mass fashion", their main differences are: price (high fashion clothing is a luxury product, which makes it extremely expensive compared to mass fashion), time (as a rule, high fashion clothing items take much longer to produce, as they involve many processes from design and engineering to sampling and production), quality (mass fashion uses cheaper materials in the production of clothing to reduce costs and lower the cost of goods), discontinuity (in order to reduce the cost of production) (High Fashion vs. Low Fashion, 2020). Despite these differences, today the boundaries between these concepts are becoming more transparent. Fashion is defined as the style of clothing that consumers wear at certain periods, while fashion trends are a phenomenon that is difficult to keep up with, making the life cycle of its products short. Moreover, the product range is extremely diverse, demand is unpredictable and volatile, and supply chains are long and rigid, resulting in a strong negative impact on the environment. The fashion industry needs to change its approach and move towards a more sustainable one, namely away from the use of fossil fuels and fast-fashion business models (cheap and affordable clothing that follows the latest fashion trends without considering environmental and social impacts), bridging the gap with sustainability (Ikram, 2022).
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In the past producing of the clothes required much less amounts of energy and water, the textile and apparel industry contributed lowly to pollution. For example, our grandparents had 5 times less clothes than the current generation. Why is this phenomenon appeared? The main reasons are the availability of the clothes and the cheaper prices. Consequently, this drops over the last 20 years has allowed customers to buy more and more clothes. The lifecycle of these clothes is short and now can be described as “take, make, waste”(Ikram, 2022). In high-income countries the principal of the fast fashion industry for clothing, footwear and upholstered furniture works in the way of buying, discarding, and replacing with new fashions, which will be soon discarded and replaced (How fast fashion can cut its staggering environmental impact, 2022). Moreover, the product varieties are diverse, demand is unpredictable and volatile, and supply chains are long and rigid. In the one point of view the cheap clothes make the variety of the products, which are available fro everyone. However, on the other side it could be possible only by decreasing the production costs that involves health issues, planet, and garment workers’ lives.
Washing clothes results in 50 billion plastic bottles with microfibers being thrown away every year. 60% of clothing items are made of a plastic material - polyester, which does not degrade in the ocean and emits almost three times as much CO2 as cotton. Fast fashion leads to people wearing the clothes they buy a couple of times and then throwing them away, which causes undesirable environmental and social damage.
According to Soil Association (SA) research, non-organic cotton contains toxic chemicals including heavy metals, formaldehyde and aromatic solvents (Organic Cotton, n.d.). Moreover, 30% of the world's cotton has been genetically modified. Companies are also trying to reduce production costs through low wages for workers, thereby reducing the cost of their product, and this is a major contributor to environmental pollution. However, due to the introduction of innovative technologies, the situation is undergoing a positive change. Namely the introduction of technologies for recycling, disposal or reuse of textile fibers which can be used for recycling. In the fashion industry, there is a huge potential for the introduction of innovative technologies at all stages to contribute to the development of the "circular & green" economy.
Due to their complexity and interdependency, fashion supply chains require a change from the “take, make, waste” principle to a more sustainable approach.
Nowadays there is a big problem of the environmental pollution and one of the main reasons for this is the impact of the fashion industry. The strong negative influence on the nature drives to serious consequences on the planet. The question is how to deal with this current problem? To reduce this impact the need to change its mechanisms and operational modes substantially has appeared.
Due to the study of Climate Seed it is known that fashion is responsible for 10% of the global greenhouse gas emissions. This indicator is quite higher than the consequences of all international flights and maritime shipping combined. Moreover, fashion influence environment in terms of CO2, is responsible for 35% of emissions of plastic to the oceans and for 20% of the industrial water pollution.
The extremely high demand of the clothes productions drives to the harmful environmental impact. Now the productions rates are much greater than ever, and it called “fast fashion”. For better understanding it means the production of the cheap and low-quality clothes for the short period of time. Therefore, this kind of production increase the demand of new collections every six months and products. Because of this fact brands use non-eco materials and it increases the waste of production and retail.
In the result the thousands of the unsold clothes yearly throwed away. That means fashion industry need to change their system to decrease its influence on the environment and choose the direction of the sustainable development (ClimateSeed, 2021).
In the fashion industry there is a concept of "high fashion" and "mass fashion", their main differences are: price (high fashion clothing is a luxury product, which makes it extremely expensive compared to mass fashion), time (as a rule, high fashion clothing items take much longer to produce, as they involve many processes from design and engineering to sampling and production), quality (mass fashion uses cheaper materials in the production of clothing to reduce costs and lower the cost of goods), discontinuity (in order to reduce the cost of production) (High Fashion vs. Low Fashion, 2020). Despite these differences, today the boundaries between these concepts are becoming more transparent. Fashion is defined as the style of clothing that consumers wear at certain periods, while fashion trends are a phenomenon that is difficult to keep up with, making the life cycle of its products short. Moreover, the product range is extremely diverse, demand is unpredictable and volatile, and supply chains are long and rigid, resulting in a strong negative impact on the environment. The fashion industry needs to change its approach and move towards a more sustainable one, namely away from the use of fossil fuels and fast-fashion business models (cheap and affordable clothing that follows the latest fashion trends without considering environmental and social impacts), bridging the gap with sustainability (Ikram, 2022).
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By reviewing the literature and previous studies the environmental impact of the fashion industry and the need for sustainable business models in start-up companies was assessed. Having identified the role of the fashion industry in climate change, resource depletion and pollution, and unethical labor practices in the industry. In addition, the literature review revealed that although sustainability in the fashion industry is a key focus of many researchers, there is a gap in research regarding the sustainability potential of start-ups in this sector, as well as the factors influencing the successful development and implementation of sustainable business models in fashion start-ups. Thus, this study explored environmental and social sustainability through a case study of start-up companies that have implemented sustainable business models. The concept of business model is explained, emphasizing the importance of value proposition, creation and delivery, and value capture. The study aims to fill the gaps in the application of sustainable business models in the fashion industry for start-up companies. The study aims to develop critical factors of success that influence the creation of sustainable business model in startups, with a focus on identifying key factors that contribute to the successful implementation of sustainability practices in the early stages of business development.
To answer the research questions:What are the critical factors that influence the success of creation and implementation of a sustainable business model in startups? What is the potential of the creation and implementation of a sustainable business model in startups? the following objectives have been established in this paper: to study the potential of the creation and implementation of a sustainable business model in startups; to identify critical key factors influencing the creation and implementation SBM in start-ups and to understand the challenges of creating SBM for fashion start-ups.
In order to study the potential of the creation and implementation of a sustainable business model in startups, this study conducted a content analysis of 9 technological fashion startups and 9 emerging fashion brands that use a sustainable business model in their practices. Using the N.M.P. Bocken of SBM framework, data was collected and analyzed. The qualitative analysis identified a growing potential for the creation and implementation of SBM among fashion startups. The analysis also revealed the need and demand for sustainable business solutions to change the fashion industry and startups play an important role here. Technological innovation is necessary for fashion brands to create, implement or transport their business model into a sustainable one. Moreover, start-up fashion brands by implementing a sustainable business model gain competitive advantage by creating uniqueness of their brand, and by using transparency and social responsibility strategies to generate customer trust and loyalty, which also shows the current and growing potential of SBM implementation for start-ups.Thus, this paper has explored the potential of creating and implementing a sustainable business model by fashion start-ups through qualitative analysis.
In order to answer the second research question What are the critical factors that influence the success of creation and implementation of a sustainable business model in startups? The following tasks were defined: to identify critical key factors influencing the creation and implementation of SBM in start-ups and to understand the challenges of creating SBM for fashion start-ups. In order to fulfill these tasks, a case study of 4 fashion start-ups was conducted. The 4 start-ups were divided into two categories where the environmental or social mission of the brand prevails. Through 4 in-depth interviews with experts and analysis of secondary data (reports, articles, websites, social networks, etc.) using the N.M.P. Bocken of SBM framework and Long et al.'s approach to organizational change management through the 4-Phases Model, the factors influencing the successful creation and implementation of SBM among fashion startups were identified, namely: collaborations, networking, innovative idea and transparency with customers. These factors, when analyzed, proved to be key for the selected and evaluated fashion brands, which were identified as essential. In addition, this paper also identified the key challenges that fashion startups face in creating and implementing SBM.
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To answer the research questions:What are the critical factors that influence the success of creation and implementation of a sustainable business model in startups? What is the potential of the creation and implementation of a sustainable business model in startups? the following objectives have been established in this paper: to study the potential of the creation and implementation of a sustainable business model in startups; to identify critical key factors influencing the creation and implementation SBM in start-ups and to understand the challenges of creating SBM for fashion start-ups.
In order to study the potential of the creation and implementation of a sustainable business model in startups, this study conducted a content analysis of 9 technological fashion startups and 9 emerging fashion brands that use a sustainable business model in their practices. Using the N.M.P. Bocken of SBM framework, data was collected and analyzed. The qualitative analysis identified a growing potential for the creation and implementation of SBM among fashion startups. The analysis also revealed the need and demand for sustainable business solutions to change the fashion industry and startups play an important role here. Technological innovation is necessary for fashion brands to create, implement or transport their business model into a sustainable one. Moreover, start-up fashion brands by implementing a sustainable business model gain competitive advantage by creating uniqueness of their brand, and by using transparency and social responsibility strategies to generate customer trust and loyalty, which also shows the current and growing potential of SBM implementation for start-ups.Thus, this paper has explored the potential of creating and implementing a sustainable business model by fashion start-ups through qualitative analysis.
In order to answer the second research question What are the critical factors that influence the success of creation and implementation of a sustainable business model in startups? The following tasks were defined: to identify critical key factors influencing the creation and implementation of SBM in start-ups and to understand the challenges of creating SBM for fashion start-ups. In order to fulfill these tasks, a case study of 4 fashion start-ups was conducted. The 4 start-ups were divided into two categories where the environmental or social mission of the brand prevails. Through 4 in-depth interviews with experts and analysis of secondary data (reports, articles, websites, social networks, etc.) using the N.M.P. Bocken of SBM framework and Long et al.'s approach to organizational change management through the 4-Phases Model, the factors influencing the successful creation and implementation of SBM among fashion startups were identified, namely: collaborations, networking, innovative idea and transparency with customers. These factors, when analyzed, proved to be key for the selected and evaluated fashion brands, which were identified as essential. In addition, this paper also identified the key challenges that fashion startups face in creating and implementing SBM.
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