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This text is aimed at senior and middle managers of conventional firms who are considering adopting the Internet (or have already decided to do so) as a key element in their competitive strategy. It helps managers understand the implications of the Internet for achieving business success, by providing a framework for developing organizational capabilities to integrate the Internet into marketing, procurement, and operational strategies. The authors draw on case study data from leading dot.com and Internet-enabled conventional firms to highlight the capabilities that are necessary to succeed in the emerging digital environment; they also contrast patterns of capability development in the two categories of firms.