Ref 3 Bricks and clicks Gulati and Garino 2000 2 
If you think you need to keep your Internet initiatives separate from your traditional business, think again. Many of the most innovative Internet players are integrating their virtual and physical operations. The key to success, they've found, lies in how you carry out the integration.
Get the Right
of Bricks
B Y
R A N j A Y
G U L A T I
LlNt that once distinguished the dot-com from the incumbent is rapidly fading.
Companies are recognizing that success in the new economy will go to those who can execute clicksand-mortar strategies that bridge the physical and the virtual worlds.
But in forging such strategies, executives face a decision that is as difficult as it is crucial: should we integrate our Internet business with our tradiTHE BRIGHT
HARVARD BUSINESS REVIEW
May-Tune 2000
A N D
Clicks
J A S O N
G A R I N O
tional husiness or should we keep the two separate? Despite the obvious benefits that integration offers - cross-promotion, shared information, purchasing leverage, distribution economies, and the like - many executives now assume that Internet businesses need to he separate to thrive. Influenced by the cautionary tales of Clayton Christensen, author of The Innovator's Dilemma, they helieve that the very nature of a traditional business - its
107
Get the Right Mix of Bricks and Clicks
protectiveness of current customers, its fear of cannibalization, its general myopia-will smother any Internet initiative.
Barnes &< Noble is one company that embraced such thitiking. To compete with Amazon.com, it established a completely separate division-Barnesandnoble.com - which it ultimately spun off as a stand-alone company. By breaking free of the existing organization, the on-line outfit gained many advantages. It was able to speed up its decision making, maintain a high degree of flexibility, create an entrepreneurial culture, attract quality management, and tap into the vast pool of capital available to Internet start-ups. But despite those benefits,
Get the Right
of Bricks
B Y
R A N j A Y
G U L A T I
LlNt that once distinguished the dot-com from the incumbent is rapidly fading.
Companies are recognizing that success in the new economy will go to those who can execute clicksand-mortar strategies that bridge the physical and the virtual worlds.
But in forging such strategies, executives face a decision that is as difficult as it is crucial: should we integrate our Internet business with our tradiTHE BRIGHT
HARVARD BUSINESS REVIEW
May-Tune 2000
A N D
Clicks
J A S O N
G A R I N O
tional husiness or should we keep the two separate? Despite the obvious benefits that integration offers - cross-promotion, shared information, purchasing leverage, distribution economies, and the like - many executives now assume that Internet businesses need to he separate to thrive. Influenced by the cautionary tales of Clayton Christensen, author of The Innovator's Dilemma, they helieve that the very nature of a traditional business - its
107
Get the Right Mix of Bricks and Clicks
protectiveness of current customers, its fear of cannibalization, its general myopia-will smother any Internet initiative.
Barnes &< Noble is one company that embraced such thitiking. To compete with Amazon.com, it established a completely separate division-Barnesandnoble.com - which it ultimately spun off as a stand-alone company. By breaking free of the existing organization, the on-line outfit gained many advantages. It was able to speed up its decision making, maintain a high degree of flexibility, create an entrepreneurial culture, attract quality management, and tap into the vast pool of capital available to Internet start-ups. But despite those benefits,