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A virtuous circle is a loop of actions or events whereby results allow the loop to be repeated with ever increasing results. It is associated with self-reinforcing practices and processes that gain strength from their outputs. For example:
Customer ServiceA firm maintains an positive relationship with customers that leads to increased work satisfaction for employees leading to more positive relationships with customers.InnovationAn innovative product generates cash flows that allow a firm to fund new research and development leading to more innovative products.Urban Design A city improves its urban design leading to improved quality of life, greater economic activity and higher property values. The result is higher tax revenues that allows the city to improve its urban design.
QualityA hotel that improves quality may enjoy higher customer ratings resulting in more bookings at higher prices. The resulting revenue allows for improvements in quality.Sustainability Customers who choose the most sustainable products in a particular category help the costs of such products to come down due to economies of scale. The lower prices cause more customers to choose sustainable products. |
Type | | Definition | A process or practice that is strengthened by its results. | Also Known As | Virtuous Cycle | Related Concepts | |
Business Theory
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