Abstract

The case explores how On Holding AG (On), a Swiss based sportswear company, pioneered circularity in the running shoe industry through its Cyclon subscription model that offered a uniquely designed fully recyclable running shoe made from bio-based materials – a sustainable alternative to traditional footwear. Launched in 2020, Cyclon was On’s first step toward circularity that not only offered a premium sportswear collection but also revolutionized how consumers shopped, used, and discarded running shoes. Subscribers paid US$29.99 per month to get a fresh pair of running shoes every six months, sending the old ones back to be recycled. As On scales its Cyclon model, some major challenges lie ahead for Martin Hoffman, CEO of On, and his team. These include convincing customers to subscribe to the model; withstand fierce competition in the sustainable performance shoe market; overcome the rising subscription fatigue among consumers; ensuring the efficient collection, recycling, and redistribution of Cyclon products; and maintaining the quality and efficiency of these processes. With shoe waste being such a critical issue for the planet, what more should On do to make its Cyclon model truly scalable and impactful, encourage more consumers to subscribe to the service, and ensure that its commitment and efforts go far enough to drive change on the ground?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Assess the need for circularity in the performance footwear industry
• Understand the concept of a subscription based circular business model
• Analyze how On integrates circular economy principles through the Cyclon model
• Identify the challenges in scaling circular models in a competitive and cost-driven market
• Explore strategies that On can adopt to scale the Cyclon model globally while balancing sustainability and profitability

Keywords

On shoes; innovation; product development; circular design, environmental sustainability; Cyclon subscription model; Corporate Social Responsibility; circular economy; Shoe Waste Crisis; environmental sustainability; corporate ethics; Circular Consumption Olivier Bernhard; Caspar Coppetti; CloudTec, speedboard; CloudTec; Helion Superfoam; LightSpray