With a market valuation of R$180 million in 2015, which has jumped to R$70 billion today, Magazine Luiza is a proven success story. A benchmark company driven by exponential technologies and with an unconventional trajectory (compared to other giants in Brazilian retail), it is possible to identify some points that make Magalu's strategy clearer and that can serve as inspiration for any entrepreneur.
In the crash course Magalu: The strategy behind the phenomenon , professor Adriano Mussa, PhD, explains some of the actions that made it the phenomenon it is today.
1. From line to plane
The first step to understanding the Magalu case is to understand the point, line and plane view. Diverging from Porter's idea of the acting forces, this view sees all companies and brands as one of three types of business. Understand them in summary:
Point: Company specialized in a specific type of colombia whatsapp data market.
Line: Company that dominates a market chain. For example: Americanas is a major player in the durable consumer goods market.
Plan (ecosystem): Company that allows several other companies in a line or plan to act from its own existence in the market. For example: the American giant Amazon, which acts mainly by connecting buyers to sellers.
With these concepts established, it is necessary to know that Magalu is no longer a linear company but is now operating as a plan - and it is this market vision that has allowed it to take strategic actions that have transformed it into the player it is today.
2. New strategy, new drivers
The change in strategy led to new goals and objectives being set. As a result, Magalu executives had new drivers to follow. Understanding these drivers is essential to understanding why the path was taken - and also allows us to point out the differences from other companies. These drivers are:
Exponential Growth (3P): Acting as a third party, enabling transactions between buyers and sellers. In layman's terms: selling someone else's product.
New categories: Grow your portfolio by incorporating point and line companies into your ecosystem.
Super APP: Having a platform that supports all the services and products that your customers and sellers want to sell/buy and that allows it to be data-driven.
Faster delivery: Having the best possible service, especially in a Brazil where the population, in general, does not have a good history of trust in logistics.
MaaS (Magalu as a Service): Sale of services provided by Magalu itself. For example: automotive and financial intelligence services for its partner customers.
3. Acquisitions
Magalu's true differentiator was making the best business acquisitions, based on its new drivers, in order to aggregate and expand its services and products offered. To illustrate how it approaches this, see some of the acquisitions and mergers of 2019:
Acquire specialized data science consultancy
WhyNot Acquisition (interdependent media company)
Acquisition of Netshoes (largest online footwear retailer in Brazil)
In addition, there are constant actions to expand the reach and quality of deliveries. In the same year mentioned, more than 100 cities were covered by Logbee (a logistics and delivery company previously acquired by Magalu), the company reached the milestone of 1,000 physical stores and entered the states of Mato Grosso and Pará.