What strategy does ABC use to manage risks when moving to a circular business model?

• A. Gradual implementation rather than a complete shift
• B. Immediate full shift to circular production
• C. Relying solely on external consultants
• D. Ignoring core activity to focus on sustainability

Answer: (A)

Gradual implementation is a prudent way to manage risk when moving to a circular business model. By rolling out changes in stages, ABC can run pilots, learn from real results, and refine processes, technology, and supplier arrangements before committing to a full-scale shift. This phased approach helps control costs, spreads capital expenditure over time, and keeps the organization flexible if pilot outcomes reveal higher-than-expected costs, technical difficulties, or lower customer uptake. It also supports building internal capability and buy-in—employees gain experience with circular practices, and management can adjust plans based on feedback and performance data rather than guessing about a complete transition.

A full, immediate shift would expose the company to significant disruption and financial risk because the required changes are complex and uncertain. Relying solely on external consultants misses the opportunity to develop internal capability and long-term resilience. Ignoring core activities in pursuit of sustainability would undermine the business’s viability and strategic purpose.