A Comprehensive Framework for Development, Assessment, and Implementation of Circular Business Models: A Heuristic Decision‐Making Approach

ABSTRACT A successful transition from linear to circular business models (CBMs) requires firms to strategically integrate circular design strategies (CDSs) into their businesses. However, existing studies lack a structured linkage between CDSs and CBMs and provide limited guidance on how a portfolio of CDSs, their adoption intensity, and firms' risk tolerance jointly shape strategic roadmaps and transition pathways for CBM realization. To address this gap, this research introduces a multi‐tier hierarchical structure linking CDSs to CBMs, clarifying their contributions in shaping CBMs. It further proposes the concept of adoption levels to represent varying implementation intensities, enabling gradual and more precise CDS implementation rather than binary adoption. Given the complexity of decision‐making across multiple candidate CDSs and their adoption levels, an integrated heuristic decision‐making procedure is developed, combining circularity and risk growth functions with a goal programming model to quantitatively assess both circularity and risk along a goal‐aligned transition pathway. A schematic visualization is also developed to translate analytical outputs into intuitive managerial insights, enhancing the practical applicability of the framework. Applied to a furniture manufacturing case, the results demonstrate: (i) the framework's capability to systematically guide CBM assessment, development, and implementation; (ii) overall robustness in goal achievement alongside sensitivity to realistic goal setting; and (iii) substantial alteration in the strategic pathway of CBM realization even with minor changes in the operating business conditions or goals. Finally, the scenario analysis illustrates the framework's flexibility in translating diverse business conditions.