Abstract The circular economy has attracted the interest of business leaders, policy makers and academics alike for its potential to contribute to a more resilient, prosperous and resource‐efficient economy. The transition towards a circular economy requires new business models that challenge the linear logic of value creation that is still endemic across most industries. In turn, the transition from linear to circular business models involves the rethinking of strategic decision‐making processes and the development of new organisational capabilities. This paper addresses these important strategic implications of the emergence and implementation of circular business models. Coupling business models with open strategy and dynamic capabilities, we develop a “three‐pronged” strategy framework that advances the emerging field of circular business model research. Our contribution is crystallised into a series of propositions and future research questions for scholars working at the intersection of the circular economy and the strategy literature.
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