Question

Amazon expanded its single-product business by leveraging spare capacity into cloud computing and by offering its Kindle line of tablet computers. This is an example of____________.

A. unrelated diversification.
B. related-linked diversification.
C. taper integration.
D. backward vertical integration.

Answer 1

B) related-linked diversification.

Step-by-step explanation:

A related linked diversification strategy refers to expanding a company's product lines with products or services that are similar to the ones that it currently offers.

In this case, Amazon first sold books and selling a e-book reader follows a similar path. Since Amazon had spare cloud computing capacity, it decided to "lease it" to other businesses and is currently Amazon's star service that generates most of its cash.