To the top: the impact of digital transformation on the market value of Magazine Luiza

Guilherme Batistella Castellar, Mateus Ferreira Rumbelsperger Querido, Fernando de Souza Meirelles

Abstract


Objective of the study: This article aims to highlight the aspects that drove the implementation of digital transformation on Magazine Luiza and contribute to the development of the digital transformation theory.

Relevance/originality: Information technology (IT) offers opportunities for businesses to automatize operations and change business strategies (Henderson & Venkatraman, 1999), but it is still not clear for every business how to embrace technology (Drnevich & Croson, 2013).

Methodology/approach: Using a case study, we analyzed the main aspects of the digital transformation of the Brazilian retailer Luiza Magazine, which achieved a 43,000% increase in its share price between 2015 and 2020, mainly due to innovations enabled by IT.

Main results: We identify that some of the main aspects of the company's digital transformation have not been properly studied in the literature, such as the use of a bimodal IT structure and the use and interconnectivity between traditional and new technologies in innovative and even disruptive ways.

Theoretical/methodological contributions: This study contributes to the literature by analyzing empirical data on the pillars that support the implementation of digital transformation in an organization, which can be used as input to theory development on digital transformation.

Social/management contributions: The digital transformation of Magazine Luiza resulted in a large increase in the market value of the company. This, aligned with the company’s expansion and increasingly better results, suggests that technology has the potential to change the company’s strategy and lead to its success, corroborating Bharadwaj’s (2013) view.


Keywords


Digital transformation; Digital business strategy; Bimodal IT; Innovation; Digitalization.

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