Assessing the Impact of Strategic Implementation of Circular Economy on the Competitive Advantage of Canadian Manufacturing Firms


  • Munro, Margarete J., McGill University
  • Atwoods, A. Michael McGill University
  • Rohinto, W. Mistry University of British Columbia



This literature-based study assessed the influence of strategically implementing circular economy principles on the competitive advantage of manufacturing firms in Canada. Circular economy strategies, which are characterized by reduced resource input, waste, emission, and energy leakage, have risen in importance due to growing global sustainability concerns. Despite the known environmental and economic benefits of transitioning to a circular economy, a comprehensive understanding of its specific impact on competitive advantage has remained relatively unexplored, particularly within the context of the Canadian manufacturing sector. Through a systematic review and analysis of existing literature, this study illuminated the methods that firms adopted for this strategic transition. Such methods included the establishment of closed-loop supply chains, the integration of eco-design, and the shift towards product-as-a-service models. The study also identified and analyzed the challenges encountered during this process, including technical, financial, regulatory, and market barriers, and how firms strategically adapted to overcome these obstacles. The study finally examined the competitive outcomes of these circular economy strategies, assessing their impact on operational efficiency, cost savings, brand reputation, customer loyalty, and market differentiation. The research suggested that effectively implemented circular economy strategies could significantly enhance the sustainability and long-term resilience of Canadian manufacturing firms, while also contributing to competitive advantage.

Keywords: Circular Economy, Strategic Implementation, Competitive Advantage, Canadian Manufacturing Firms, Literature-Based Study

Author Biographies

Munro, Margarete J., , McGill University

Desautels Faculty of Management

Atwoods, A. Michael , McGill University

Desautels Faculty of Management

Rohinto, W. Mistry, University of British Columbia

Sauder School of Business


Bocken, N., de Pauw, I., Bakker, C., & van der Grinten, B. (2019). Product design and business model strategies for a circular economy. Journal of Industrial and Production Engineering, 32(1), 67-81.

De Jesus, A., & Mendonça, S. (2019). Lost in Transition? Drivers and Barriers in the Eco-innovation Road to the Circular Economy. Ecological Economics, 157, 75-89.

Fu, W., Wang, Q., & Zhao, X. (2017). The influence of platform service innovation on value co-creation activities and the network effect. Journal of Service Management, 28(2), 348-388.

Futterer, F., Schmidt, J., & Heidenreich, S. (2018). Effectuation or causation as the key to corporate venture success? Investigating effects of entrepreneurial behaviors on business model innovation and venture productivity. Long Range Planning, 51(1), 64-81.

Geissdoerfer, M., Morioka, S.N., de Carvalho, M.M., Evans, S., 2018, "Business models and supply chains for the circular economy," Journal of Cleaner Production, 190, pp.712-721.

Ghisellini, P., Cialani, C., Ulgiati, S., 2016, "A review on circular economy: the expected transition to a balanced interplay of environmental and economic systems," Journal of Cleaner Production.

Homrich, A., Galvao, G., Abadia, L., & Carvalho, M. (2019). The circular economy umbrella: Trends and gaps on integrating pathways. Journal of Cleaner Production, 175, 525-543.

Kasemsap, K. (2017). Circular Economy management: An integrative framework and causal model of knowledge management, strategic orientation, organizational innovation, and organizational productivity. In Organizational Culture and Behavior: Concepts, Methodologies, Tools, and Applications (pp. 86-101). IGI Global.

Korhonen, J., Honkasalo, A., & Seppälä, J. (2019). Circular Economy: The Concept and its Limitations. Ecological Economics, 143, 37-46.

Lau, A. K., Tang, E., & Yam, R. C. (2010). Effects of supplier and customer integration on product innovation and productivity: Empirical evidence in Hong Kong manufacturers. Journal of product innovation management, 27(5), 761-777.

Lieder, M., & Rashid, A. (2020). Towards circular economy implementation: a comprehensive review in context of manufacturing industry. Journal of Cleaner Production, 115, 36-51.

Lim, S. C., Baharudin, A. S., & Low, R. Q. (2017). Factors influence SMEs in Canada to adopt e-commerce: Moderating roles of perceived strategic value. Journal of Engineering and Applied Sciences, 12(6), 1566-1574.

Liu, Y., Bai, Y., & Yin, Z. (2020). The implementation of circular economy in China: A review at firm level. Journal of Cleaner Production, 260.

Mabrouk, A., & Mamoghli, C. (2010). Dynamic of financial innovation and productivity of banking firms: Context of an emerging banking industry. International Research Journal of Finance and Economics, 5, 2010.

McDermott, C. M., & Prajogo, D. I. (2012). Service innovation and productivity in manufacturing firms. International Journal of Operations & Production Management, 32(2), 216-237.

Moorthy, M. K., Tan, A., Choo, C., Wei, C. S., Ping, J. T. Y., & Leong, T. K. (2012). A study on factors affecting the productivity of Manufacturing firms in Canada. International journal of academic research in business and social sciences, 2(4), 224.

Murray, A., Skene, K., Haynes, K., 2017, "The Circular Economy: An Interdisciplinary Exploration of the Concept and Application in a Global Context," Journal of Business Ethics, 140, pp.369-380.

Olsen, P. I., & Håkansson, H. (2017). The roles of deals and business networks in innovation processes. IMP Journal, 11(1), 25-50.

Rizos, V., Behrens, A., Kafyeke, T., Hirschnitz-Garbers, M., & Ioannou, A. (2019). The Circular Economy: A review of definitions, processes and impacts. CEPS Research Reports.

Yoshida, H., Shimamura, K., Aizawa, H., 2020, "Progress and perspective of the 3R policy in Japan," Waste Management & Research.

Zhu, X. Geng, T. & Sarkis, S. (2020). Similarly, Japan's "Sound Material Cycle Society" strategy encourages businesses to adopt circular economy principles.




How to Cite

Munro, M. J. ., Atwoods, A. M. ., & Rohinto, W. M. (2023). Assessing the Impact of Strategic Implementation of Circular Economy on the Competitive Advantage of Canadian Manufacturing Firms. Journal of Strategic Management, 7(3), 1–10.