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Digital Transformation At Brazilian Retailer Magazine Luiza Case Solution

Solution Id Length Case Author Case Publisher
1781 743 Words (4 Pages) Thales S. Teixeira, Leandro Guissoni, Tania Modesto Veludo-de-Oliveira Harvard Business School : 519009
This solution includes: A Word File A Word File

With high development, the Brazilian economy was experiencing a boost in its e-commerce industry. The high penetration of the internet, along with the high usage of smartphones by the population mad access to online retailing easier, and less complicated. Ecommerce was particularly on the rise in the south eastern region of Brazil, for the population group aged 24-45 years old. The shift in the retail landscape in Brazil led to a change in the conventional roles and responsibilities. Customers were now more aware of the products, offerings, as well as competing offerings – which often led to confusion and aggression on the aorta of the salespersons. Companies were also struggling to strategies their online and offline operations to create a cohesive brand image and offering. Magazine Luiz was also digitalizing operations to benefit from the surge in e-commerce consumption.

Following questions are answered in this case study solution

  1. Introduction

  2. Problem Statement 

  3. Assumptions 

  4. Alternatives   

  5. Recommendations

Case Analysis for Digital Transformation At Brazilian Retailer Magazine Luiza

2. Problem Statement 

The main challenge faced by Magazine Luiza's CEO, Trajano, was to decide how to take the company forward – as a tech company which would lead to an exponentially higher growth rate (e.g., high double digits) or adopt a more conservative approach which would lead to a healthier financial growth, like other retailers. This decision underlines other challenges and issues for Trajano as well, including:

  • Managing the cultural change at Magazine Luiza to ensure exposure to new skills and values required by the organization and employees for the transformation

  • Developing skills through training and learning in employees regarding e-commerce channels

  • Omni channel management – and skills required for it

  • The associated capital investment

  • Marketing the channel offerings and diversity in an integrated manner to respective target consumers without causing confusion

3. Assumptions 

The case requires us to make fundamental assumptions about the workforce, organizational culture, flexibility, and corporate strategy at large – all working in favor of magazine Luiza – facilitating smooth operations, and resistant free change processes. The case lags information especially about the organization itself. There are no clear indicators or detail about the business in itself, and what sort of retail products does magazine Luiza house. Additionally, the case lags information about employee management. There are no details present about the current employee skills and management systems, the training and development activities that the firm has undertaken for upgrading their potential and familiarity with e0-commerce channels as well as the potential talent pool available for new job roles and tasks. These factors reflect additional costs for the company, which must be accounted for. The case also fails to provide a psychographic and behavioral profile of current customers, as well as potential customers which would make a comparison and a cost-benefit analysis easier. Lastly, the case has also failed to provide adequate details regarding the marketing strategy that magazine Luiza carries out, with respect to online and offline channels – and associated costs to help make a better decision for the company.

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