Before embarking on a native app strategy, it's important to determine these key points:

How Will the Consumer Use the App?
If the application needs to use embedded features of the device (microphone, speaker, camera, vibration, accelerometer, etc.), a native app is more appropriate than a mobile website. If the app relies heavily on the Internet for content (i.e., a dynamic catalog of products), a website is more appropriate.

How Fast and User Friendly Do You Want the App to Be?
Since a native app is explicitly downloaded and stored on the device, in general the user experience can be made better than that of a mobile website. For one, the user interface can be cleaner and without multiple frames/page reloads. Native apps tend to have better graphics and a smoother user experience due to the tighter integration with the device.

How Will the App Be Distributed?
Native apps can be distributed for free through app stores. However, a negative is the loss of control through the approval process, monetization, and promotion of the app. Mobile websites, on the other hand, are usually marketed directly to the consumer using search engines or on branded websites.

What is Your Budget?
Native apps are typically considerably more expensive to develop than mobile websites, as they need to be developed for each specific operating system - iOS, Android (multiple devices), Blackberry, Windows, etc.  And, native apps can also take much longer to develop. Maintaining native apps on multiple operating systems is also expensive and time consuming.