Get the Right Mix of Bricks Clicks

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 ClicksB Y R A N j A Y G U L A T I A N D J A S O N G A R I N O

T H E B R I G H T LlNt that once distinguished thedot-com from the incumbent is rapidly fading.Companies are recognizing that success in the neweconomy will go to those who can execute clicks-and-mortar strategies that bridge the physical andthe virtual worlds.

But in forging such strategies, executives face adecision that is as difficult as it is crucial: shouldwe integrate our Internet business with our tradi-

tional husiness or should we keep the two sepa-rate? Despite the obvious benefits that integrationoffers - cross-promotion, shared information, pur-chasing leverage, distribution economies, and thelike - many executives now assume that Internetbusinesses need to he separate to thrive. Influencedby the cautionary tales of Clayton Christensen,author of The Innovator's Dilemma, they helievethat the very nature of a traditional business - its

HARVARD BUSINESS REVIEW May-Tune 2000 107

Get the Right Mix of Bricks and Clicks

protectiveness of current customers, its fear ofcannibalization, its general myopia-will smotherany Internet initiative.

Barnes &< Noble is one company that embracedsuch thitiking. To compete with Amazon.com, itestablished a completely separate division-Barnes-andnoble.com - which it ultimately spun off as astand-alone company. By breaking free of the exist-ing organization, the on-line outfit gained manyadvantages. It was able to speed up its decisionmaking, maintain a high degree of flexibility, createan entrepreneurial culture, attract quality manage-ment, and tap into the vast pool of capital availableto Internet start-ups. But despite those benefits,Barnesandnoble.corn has struggled. In January 2000,CEO Jonathan Bulkeley resigned after only a year onthe job. In February, its stock price full to aii all-timelow of 7.5, down more than 50% from its offeringprice of 18. By divorcing its on-line business fromits established stores, Barnes &. Noble may haveactually sacrificed tnore than it gained. For example,the compatiy forfeited tremendous marketing op-portunities by not promoting Barnesandnoble.comin its stores.

In studying how incumbent companies likeBarnes &. Noble have moved onto the Web, we bavelearned a lot about clicks-and-mortar strategies andtheir likelihood of success. Our most importantfinding is a simple one: the benefits of integrationare almost always too great to abandon entirely.Instead of focusing on an either-or choice - Shouldwe develop our Internet channel in-house or launcha spin-off? - executives should be asking. Whatdegree of integration makes sense for our company?In this article, we'll look at three established retailersthat have taken very different approaches to inte-grating their physical and virtual operations. Theirexperience reveals the spectrum of choices avail-able and illustrates some of the trade-offs involvedia each choice.

Office Depot's Seamless Strategyoffice Depot has found success by tightly integratingits Web site and its physical stores to form a single,seamless retailing network. As CIO Bill Seltzer putsit, "The Internet is just another channel that getsplugged into the business architecture."

The company had two very good reasons to inte-grate the on-line business rather than spin it off.First, its existing catalog-sales operation providedit with much of the service infrastructure neededto support an Internet store. With a professionalcall center and a fieet of more than 2,000 deliverytrucks. Office Depot was well equipped to process

individual orders and deliver directly to the con-sumer. Second, years earlier it had developed asophisticated information system containingcomplete product, vendor, customer, and orderinformation as well as real-time inventory datafor each of the company's 1,825 stores and 30warehouses. That system made it easy to coordinateOffice Depot's on-line store and its physical outlets.

By providing informationabout store locationsand inventory on-line,

Office Depot's Web site hasactually increased the traffic

at its physical outlets.

For customers, the integrated channels makeshopping simple and convenient. Let's say you'relooking to buy a new printer. You ean researcb yourchoices at OffieeDepot.com, clicking through richinformation on features and prices. Once you findthe best model for your needs, you can buy it on-lineand have it delivered the next day free of charge. Or,if you need it immediately, you can cheek the site toensure it's in stock at your neighborhood OfficeDepot superstore and go pick it up yourself.

By providing information about store locationsand inventory on-line. Office Depot's Web site hasactually iticreased the traffic at its physical outlets.At the same time, the company uses its stores topromote its site. It is, for example, expanding a pilotprogram that uses in-store kiosks to give customersWeb site access. The customers can use the site toresearch the choices available to them in the physicalstore. And by learning about the capabilities of thesite, they increase their likelihood of using it whileat work or at home. Rather than cannibalize eachother, the two channels promote each other, creat-ing a virtuous circle.

OfficeDepot.com does cannibalize the catalogbusiness to some degree, but that's probably a good

Ranjay Gulati is an associate professor at NorthwesternUniversity's f.L. Kellogg School of Management inEvanston. Illinois, and a membei of its Technology andE-Commerce Group. A student at Northwestern. JasonGaritto will join the Chicago office of the Boston Con-sulting Group this fall

To discuss this article, join HBR's authors and readers inthe HBR forunj at www.hbr.org/forum.

108 HARVARD BUSINESS REVIEW May-|uoe 2000

Get the Right Mix of Bricks and CUcks

thing. It's cheaper to reach customers throughthe Weh than through catalogs, which are expen-sive to print and mail. Products and prices can bechanged continually on the Web, whereas catalogsquickly go out of date. And it's more efficient totake orders on the Web than over the phone. Onaverage, a Web transaction costs half as much toprocess as a catalog order.

OfficeDepot.com further complements the exist-ing physical stores hy providing added value to thecompany's 50,000 contract customers - large andmidsize corporations that spend a great deal ofmoney on office products. For example, each con-tract customer has its own specialized view of theOfficeDepot.com site. When the customer's em-ployees log onto the site, they are automatically as-signed an authorization level that limits what theycan buy and how much they can spend. A secretary,for instance, may be able to buy only basic prod-ucts - pens, staplers, and paper - while the officemanager can huy anything on the site. This autho-rization system eliminates paper purchase orders,which typically cost corporations anywhere from$75 to $200 each to generate and process. In addi-tion. Office Depot gives many of its larger contractcustomers an additional discount if they place theirorders on-line instead of phoning or faxing themin-saving money for Office Depot as well as for thecustomer.

While many customers have shifted from catalogpurchases to Web buying, some still prefer catalogs.Even here, though, the integration of the Web sitepays off. When customers call in, the agents theyspeak with use the Web interface to enter orders. Theagents can provide detailed product information[which serves to minimize returns), check inventory,suggest alternatives to an out-of-stock product, andcross-sell complementary products. They can alsopull up the customer's order history, accelerating theorder entry process. Since the browser-based orderentry system was installed, there has been a markedincrease in the catalog operation's productivity andaverage order size. Seltzer says.

Office Depot's experience shows that in somecases the benefits of integration overwhelm the ad-vantages of separation. If Office Depot had set up itsWeh operation as a stand-alone business, it mayhave achieved greater organizational focus and flex-ibility, but it would have sacrificed the customerbenefits and the strategic advantages that comefrom integration, such as cross-sell ing, brand recog-nition, and purchasing leverage. As a separate oper-ation, OfficeDepot.com would have been just an-other e-tailer struggling to attract customers whilefighting endless price wars.

KB Toys' Joint Venture

Other retailing sectors are less amenahle to a tightintegration between bricks and clicks. Take toys,for instance. Big toy retailers don't have much expe-rience with catalog retailing; they tend to focusexclusively on their physical stores. So launchinga Web store would require creating a whole newdirect-marketing infrastructure and developing anew set of management skills. Also, toy shopperstend to he highly price sensitive - in stark contrastto business-supplies buyers, who place a high valueon a retailer's flexibility and responsiveness. If yourcustomers want flexihility, creating a new channelprovides added value to them. If all they care aboutis getting the lowest price, a new channel merelycreates more competition for your existing outlets.

By joining an existing e-tailer,KB Toys has been able to

capitalize on the advantages ofboth integration and separation.

Although eToys, the largest toy e-tailer, and ToysR Us, the biggest toy retailer overall, have receivedmost of the media attention, the toy company thathas developed the smartest e-business strategymay well be Consolidated Stores Corporation'sKB Toys unit. Rather than create its own Web storefrom scratch, KB Toys joined forces with Brain-Play.com, an e-tailer of children's products, to cre-ate KBkids.com. Consolidated Stores invested$80 million in the joint venture, as well as con-tributing its well-established hrand, and receivedan 80% stake in the company. BrainPlay, whichnow operates exclusively under the KBkids.comname, provided the e-commerce expertise andsavvy that KB Toys sorely lacked. By joining withan existing e-tailer, KB Toys has been able to capi-talize on the advantages of hoth integration andseparation.

Organizationally, KBkids keeps its distance fromKB Toys. It is headquartered in BrainPlay's formeroffices in Denver - 2,000 miles from the Massa-chusetts headquarters of KB Toys - and it is runlargely by the management team and technicalstaff that launched BrainPlay. These people areused to moving at Internet speed and dealing withthe unique challenges of e-commerce, and theyhave been able to maintain the fast-paced and free-wheeling culture of a dot-com start-up. "All we do

HARVARD BUSINESS REVIEW May-|une 2000 109


THE CLICKS-AND-MORTAR SPECTRUM

SeparationSpin-Off(Barnesandnoble.com)

greaterfocus

moreflexibility

' access toventure funding

(Rite Aid andDrugstore.com)

JointVenture

(K6kids.com)

Division(OfficeDepotcom)

Integration

establishedbrand

The integration-separation decision isnot a binary choice. Different companieswili need to follow very different pathsin deciding how closely-or loosely-tointegrate their Internet initiatives withtheirtraditional operations.

sharedinformation

purchasingleverage i

distributionefficiencies

I

is the Internet/' states KBkids.com CEO SrikantSrinivasan.

Although they appear to be completely separate,the two companies are actually tightly integratedin certain respects. Most obvious is the sharedbrand. The KB Toys name garners a striking 80%awareness among toy huyers, giving KBkids anadvantage that pure-play dot-coms simply can'tmatch-no matter how much they spend on SuperBowl ads. The physical stores also heavily promotethe Web site through in-store advertising and dis-plays. Only a few months after KBkids' launch,Gomez Advisors ranked the site number one incustomer confidence in its Toy Scorecard Report.Such quick recognition and trust could not havebeen achieved without the strong KB brand. Thebrand advantage will only increase in importance.As the next wave of Internet shoppers comes on-line, many will be unfamiliar with the names ofInternet-only toy retailers, hut the overwhelmingmajority will immediately recognize the KB brand.

The company was also smart to name the siteKBkids.com instead of KBtoys.com. By avoiding theword "toys" in its name, the site gains the advan-tages of the integrated brand while also enjoying theflexihility essential to Net success. Srinivasan seesKBkids as far more than an extension of KB Toys.

"We want to become the leading retailer of manychildren's products," he says.

Another area of integration lies in customerservice. Anything bought on-line at KBkids can hereturned at any of the more than 1,300 bricks-and-mortar KB Toys stores. That provides an enormousconvenience to Web shoppers - another advantagethat pure-play e-tailers can't match. At the sametime, it helps the physical stores hy getting morecustomers to walk through the door.

A third integration advantage lies at the oppo-site end of the business - in the purchasing func-tion, where KBkids has been ahle to fully lever-age KB Toys' relationships with suppliers. As thesecond largest specialty toy retailer, KB Toysenjoys enormous market power, enabling it tonegotiate advantageous prices and terms with toymanufacturers. To tap into this power, KBkids inte-grates its buyers with those from KB Toys. Whilethey technically exist as two separate staffs, theywork together in the Massachusetts facility, coordi-nating and consolidating purchases. Lacking thiskind of purchasing leverage, the pure-play e-tailersare hard pressed to match KBkids' prices withoutfalling ever further into the red. Even better, theintegrated companies have the clout to negotiateexclusives with suppliers. This past holiday season.

no HARVARD BUSINESS REVIEW May-)uac 2000


the popular Talk Together Teletubbies were avail-able only at KBkids, while the Toy Story 2 Inter-active Talking Train Set was available exclusivelyat KB Toys and KBkids.

The advantages of integration don't all flow tothe Web operation, either. The physical stores alsogain greater huying power. Srinivasan helieves thesuccessful clicks-and-mortar retailer is a supplier'sdream: "[The physical storesj offer the scale; weoffer the growth." A manufacturer of a hot, hard-to-Hnd toy is far more likely to send its next ship-ment to a high-growth, innovative distributor likeKB than to a weakening hricks-and-mortar retaileror to a pure-play that may account for just a tinyfraction of its total sales.

Finally, although the two companies' manage-ment teams are distinct, KBkids is neverthelessable to draw on KB Toys' 70 years of experience sell-ing toys. Naturally, KB Toys' management has in-stincts about the industry that no start-up team canmatch. To ensure a healthy cross-fertilization ofideas, three members of the KBkids board of direc-tors are executives in either KB Toys or ConsolidatedStores. The companies also encourage frequentcommunication among managers at all levels.

What about that nasty issue of channel confiict?"We see very little cannibalization between theWeh site and the stores," contends Srinivasan."KB Toys is a mall store chain, driven hy impulsepurchases, not destination purchases. But whenpeople come to our Web site, they are looking forsomething specific." Bricks-and-mortar toy retailersthat maintain big, stand-alone destination stores,like Toys R Us, will usually have much greaterchannel conflicts with Web operations than KBToys does.

Rite Aid's Virtual PartnershipThe drugstore industry has seen the rise of a vari-ety of clicks-and-mortar strategies. Walgreens.com,for example, is fully owned and operated by itsbricks-and-mortar parent. Last June, CVS acquiredSoma.com, which it promptly renamed CVS.comin order to "leverage the brand recognition, cus-tomer satisfaction, and reputation of CVS," accord-ing to Tom Pigott, president and CEO of CVS.com.Although CVS.com is fully owned by CVS, it main-tains a separate management team in Washing-ton - across the country from CVS's Rhode Islandheadquarters. Drugstore giant Rite Aid took a dif-ferent approach, one centered on partnership ratherthan ownership.

Because Rite Aid assumed that only a small frac-tion of its sales would come through the Inter-

net, its initial in-house efforts to launch an on-line channel were tentative. Four months afterSoma.com was up and running, Rite Aid's site onlylet customers schedule an in-store prescriptionpickup; they couldn't buy a thing on-line, Whenit became clear that the Net would be a criticalretail channel. Rite Aid needed a real Web pres-ence-fast. So in June 1999, Rite Aid bought a 25.3 %equity stake in Drugstore.com for a mere $7.6 mil-lion [plus additional noncash considerations). Asformer Rite Aid chairman and CEO Martin Grassexplained in a press release, a strategic partnershipwith Drugstore.com "makes a lot more economicsense...than spending the money and time it wouldtake away from our core businesses to develop,own, and manage our own site." Drugstore.com

The partnership between Rite Aidand Drugstore.com lets eachcompany take advantage of

the other's expertise withoutsacrificing flexibility.

was an ideal partner hecause it brought Internetcapahilities and strong investors, thus limitingRite Aid's investment risk in e-commerce.

Like CVS, Rite Aid opted to import Internet ex-pertise, but that's where the similarity ends. RiteAid and Drugstore.com arc separately owned andmanaged, and although both brands are promotedin both channels, they remain distinct. For in-stance. Rite Aid hasn't pushed to rename Drug-store.com "RiteAid.coin." To do so would be a mis-take: after all, venues like Drugstore.com croppedup because the traditional hricks-and-mortar storesweren't delivering an ideal customer experience.(Kids love running through toy stores, but hardlyanyone looks forward to browsing through drug-store aisles.)

Even though the companies maintain their in-dividual brands, they want the pharmacies to ap-pear integrated to consumers. To that end. Drug-store.com has launched several initiatives to buildits brand among Rite Aid customers. "From a brand-ing perspective, all Rite Aid prescription bottlecaps, shopping bags, and payment receipts containthe Drugstore.com logo," says Jackie Erickson, busi-ness manager at Drugstore.com. "From a merchan-dising perspective, we're working with Rite Aid tomake in-store offers and calendar-related activitiescomplement each other." During the holiday season,

HARVARD BUSINESS REVIEW May-June 2000 111


Office Depot andOfficeDepotcom

KB Toys andKBkids.com

Rite Aid andDrugstore.com

for example. Rite Aid put $15 Drug-store.com coupons in customers'bags. Keeping separate names whilepromoting the partnership accom-plishes two things, explains DebbyFry Wilson, PR director at Drug-store.com: it protects the trust andrecognition associated with theRite Aid name and at the same timeestablishes a "clean brand that fitson-line expectations."

Rite Aid and Drugstore.com havealso integrated many of their busi-ness functions, including fulfill-ment. The operational integrationwas crucial to Drugstore.com be-cause it gave the company accessto PCS Health Systems, Rite Aid'spharmacy benefits management(PBM) subsidiary that serves morethan so million people. Earlier, theleading PBMs were reluctant to dobusiness with Drugstore.com be-cause they considered the companya threat to their own Internet strate-gies. Since prescription sales arean important revenue stream forDrugstore.com - and since 80% ofAmericans are covered by a PBM-losing that business would haveheen disastrous. But now, since itsfulfillment operations are inte-grated with Rite Aid's, customerswho can make a copayment at RiteAid can also do so at Drugstore.com. Rite Aid bene-fits as well because its PBM gains increased busi-ness. The integrated fulfillment functions give bothcompanies greater buying power, providing signifi-cant cost savings.

The Rite Aid- Drugstore.com partnership bene-fits consumers as well as the two businesses. Cus-tomers can elect to pick up their Drugstore.comprescriptions at their local Rite Aid rather thanwait for them to be shipped-a huge advantage since30% of all prescriptions are needed immediately.Because people who choose that option completethe entire transaction on-line, they still pay theDrugstore.com price. This arrangement lets Drug-store.com serve the acute-needs market for same-day prescriptions and allows the two companies tocapture a larger share of the customer's wallet. RiteAid also enjoys increased store traffic.

To get the most value out of their partnership.Rite Aid and Drugstore.com have even establishedan integration team. Although the two companies

CLICKS-AND-MORTAR STRATEGIES

Brand

Office Depot andOfficeDepot.com

lostly Integrated

KB Toys and KBkids.com

Leverages KB brand namewithout losing flexibility

Slightly Integ

Cobranded Rite Aid andDrugstore.com pharmacies

Management

Fully Integrated

OfficeDepot.com is technicailypart of the business servicesdivision, although its reachextends to the stores andinternational divisions

Slightly Integrated

Independent managementteams

Frequent interactionbetween counterparts

Three executives fromKB To^ or ConsolidatedStores serve as membersof KBkids.com's board

Slightly Integrated

Independent managementteams

Frequent interaction betweencounterparts

Rite Aid's president sits onDrugstore.com's board

are managed separately, the team gives executivesa forum for regularly sharing ideas about their busi-nesses. More formally, Mary Sammons, Rite Aid'spresident and COO, sits on Drugstore.com's boardof directors. Drugstore.com reaps the advantages ofher experience and connections, but its strategicdecisions arc made autonomously. Ultimately, thepartnership between Rite Aid and Drugstore.comlets each company take advantage of the other'sexpertise without sacrificing flexibility. AlthoughRite Aid's traditional business has had its shareof problems recently, its innovative partnershipwith Drugstore.com remains a bright spot for thecompany-and a useful model for others.

A Spectrum of ChoicesAs the divergent strategies of Office Depot,KB Toys, and Rite Aid reveal, the integration-separation decision is not a binary choice. There areinfinite permutations along the integration spec-

112 HARVARD BUSINESS REVIEW May-fune 2000


Operations

Fuiiy Integrated

internet systems are simplya layer on top of existinginformation systems

Uses bricks-and-mortardistribution systems toguarantee next-day deiivery

Moderateiy integrated

Separate distribution systems

Shared buying power

Customers can returntoys bought on-iine tobricks-and-mortar stores

Equity

Fuily Integrated

OfficeDepot.com is whollyowned by Office Depot

NotlikeiytospinofFanytime soon

KBkids.com is a jdimwith BrainPlay.com

KB Toys owns 80% andBrainPlayowns2o%

ure

erateiy integrated

New, integrated distributioncenter

Shared buying power

Customers can pick upprescriptions ordered on-lineat bricks-and mortar stores

Separate

Rite Aid received more than25% of Drugstore.com

:ores I

mtrum. By thinking carefully about which aspects ofa business to integrate and which to keep distinct,companies can tailor their clicks-and-mortar strat-egy to their own particular market and competi-tive situation, dramatically increasing the odds ofe-business success.

As a useful starting point, we recommend exam-ining four business dimensions - brand, manage-ment, operations, and equity-and determining thedegree of integration that makes sense along each.The exhibit "Clicks-and-Mortar Strategies" showshow the three companies we looked at have posi-tioned themselves on the integration spectrum foreach dimension.

Brand. The choice to integrate brands or keepthem separate is largely a choice between trustand flexibility. Extending a company's currentbrand to the Internet gives instant credibility toa Web site (assuming, of course, that the brand isboth recognized and respected). The company'scurrent Internet-savvy customers will provide

nearly immediate traffic and revenue, newconsumers will know the site is legit, and fewerbuyers will fear credit card fraud - a frequentinhibitor of on-line transactions. Furthermore,as we saw with Office Depot and KB Toys,brand integration can result in a virtuous cir-cle, sending on-line customers to the storesand bricks-and-mortar customers on-line, allthe while continuing to build the brand. Butin integrating a brand, a company often losesflexibility. An on-line store may be forced tooffer the same products and prices as its physi-cal counterparts - or risk leaving customersconfused and distrustful. With a shared brand,it also becomes more difficult to use the Inter-net to target a different customer segment.KBkids sidestepped this trade-off, using aslight variation on the KB Toys name to lever-age the existing brand without limiting itsscope to toys. A little creativity can pay hugedividends in the Internet space.

Management. Whether a firm should inte-grate or separate its management teams is a sub-tler question whose answer hinges both onmanagement attitudes and on the company'sbusiness model. An integrated team can betteralign strategic objectives, find and exploit syn-ergies, and share knowledge. Separate teamscan focus more sharply, innovate more freely,and avoid contaminating one business modelwith another. Even here, companies don't haveto make an all-or-nothing decision - they canintegrate certain functions and leave othersseparate. The purchasing staffs of KB Toys and

KBkids.com are managed together, while the com-panies' senior executives operate autonomously.

Operations. Decisions about integrating opera-tions should be based on the strength of a company'sexisting distribution and information systems andtheir transferability to the Internet. Integration canprovide significant cost savings, a more compellingand informative site, and a competitive advantageover pure-play competitors - as was the case withOffice Depot. Separation lets a company build state-of-the art, customized systems without the tlaws ofolder systems and develop sophisticated Internet-specific distribution capabilities that could providea superior customer experience.

Equity. To own or to spin off? Of all the integrationdecisions, that's the one that will get the mostattention. Integration allows the parent to capturethe entire value of its Internet business, as OfficeDepot is doing. Separation can help attract and retaintalented managers and provide access to outsidecapital. By establishing its KBkids.com venture as a

HARVARD BUSINESS REVIEW May-June 2000 113


A ROAD MAP THROUGH THE

DECISION PROCESS

Which clicks-and-mortar approach should you adopt? Although theintegration-separation decision is not an either-or choice, the followingquestions will help you discover which aspeas of your on-line channel

you should integrate and which you should keep distinct.

SeparationBrand

Integration

Does the brand extend naturally to the Internet?

Will we target a different customer segment or offera different product mix on-line than in stores?

Wili we need to price differently on-line thanin stores to stay competitive?

ManagementDo current executives have the skills and experienceneeded to pursue the Internet channel?

Are they willing to judge the Internet initiativesby a different set of performance criteria?

Will there be major channel confiict?

Does the Internet fundamentally threatenthe current business model?

OperationsDo our distribution systems translate wellto the I nternet?

Do our information systems provide a solidfoundation on which to build?

Does either system constitute a significantcompetitive advantage?

EquityAre we having trouble attracting or maintainingtalented executives for the Internet division?

Do we need outside capital to fund the venture?

Is a certain supplier, distributor, or other partnerkey to the venture's success?

separate business, KBToys garnered the man-agement expertise ofpure-play BrainPlay,saved itself the expenseof starting an Internetchannel from scratch,and maintained theoption of an initial pub-lic offering. Separateownership can also offergreater flexibility inpartnering with othercompanies. Finally, bymaintaining an equitystake in a separate Inter-net company, a bricks-and-mortar companycould reap a windfall inthe stock market.

Clicks-and-mortarbusinesses are here tostay. The question is.Which models will win?The answer will, to alarge extent, he deter-mined hy a company'sability to manage thetrade-offs between sep-aration and integration.(Sec the exhibit "ARoad Map Through theDecision Process.") Byavoiding an either-orchoice and consideringeach aspect of its busi-ness on its own, a com-pany can strike the rightbalance between thefreedom, flexihility, andcreativity that comewith separation and theoperating, marketing,and information econo-mies that come withintegration. ^

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