Transitioning to a Circular Economy in Thai cosmetic SMEs: Drivers and Barriers to Competitive Advantage
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Abstract
This study aims to (1) describe the process and interpretation of the circular economy among SMEs in the cosmetics industry, (2) test the influence of perceived driving factors (PD) and perceived barriers (PB) on investment in the circular economy transition (TCE) and competitive advantage (CA), and (3) synthesize strategic approaches to drive it. A sequential exploratory mixed method was used as (1) the social constructivist grounded theory methodology through in-depth interviews with 10 SMEs, (2) testing the relationships between PD, PB, TCE, and CA with partial least squares structural equation modeling, (3) using thematic analysis to synthesize the qualitative and quantitative results. The results showed that SMEs construct the meaning of the circular economy through the logic of cost-effectiveness, waste reduction, market image, and gradual transition through pilot projects, stakeholder engagement, and experiential learning. The statistical results indicate that PD had a positive influence on TCE (β = .181, t = 2.802, p = .005), PB had a negative influence on TCE (β = -.540, t = 8.087, p < .001), and TCE had a significant positive influence on CA (β = .606, t = 12.321, p < .001). The thematic analysis led to the development of a strategic roadmap focusing on reducing structural barriers, pilot testing, and scaling up into a competitive strategy.
The knowledge and findings from this research provide a roadmap for Thai cosmetic SMEs to plan their transition to circular economy, focusing on controllable and low-risk areas.
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