related diversification

Related diversification is a business strategy where a company expands its operations into areas that are closely related to its existing products or services. This approach allows the company to leverage its current strengths, such as brand reputation, technology, or distribution channels, to enter new markets or create new products. For example, a snack food company might start producing baked goods, as both involve food production. This strategy can lead to increased efficiency and reduced risks, as the company builds on its established knowledge and resources.