Adaptive Cycles in Open Innovation: A Longitudinal Study of Circular Economy Collaborations in a Fashion Incumbent

ABSTRACT This single case study examines how the H&M Group, a large fashion multinational, uses open innovation (OI) to support the transition towards a circular business model. Although collaborations are recognized as key to advancing circularity, limited empirical evidence exists on how co‐creative OI processes drive circular practices across the value chain. Using adaptive cycle theory (the panarchy model) and institutional theory, the study analyses H&M Group's involvement in circular and collaborative innovation from 2010 to 2025 through a mixed‐methods approach, including case study analysis, content analysis, financial data and market trends. The findings show that H&M Group's participation in circular OI initiatives targets seven main categories of collaborations in a nonlinear process shaped by recursive interactions between institutional factors and financial and competitive pressures. The research demonstrates the existence of a full adaptive cycle of circular OI participation, offering insights for researchers, industry actors and policymakers.