[Solved] Using the company Amazon: Which type of diversification strategy is... (2024)

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[Solved] Using the company Amazon: Which type of diversification strategy is...? ›

Answer & Explanation. 1. Amazon

There are three types of diversification: Related Diversification —Diversifying into business lines in the same industry; Volkswagen acquiring Audi is an example. Unrelated Diversification —Diversifying into new industries, such as Amazon entering the grocery store business with its purchase of Whole Foods.

Diversification is a growth strategy that involves entering into a new market or industry - one that your business doesn't currently operate in - while also creating a new product for that new market.

Examples of Diversification: Amazon

Amazon was originally an online bookseller, and it was a very successful one after its launch in 1995. Books were easy to source and distribute but Jeff Bezos planned to diversify. Amazon began selling video games and other multimedia in 1998.

Amazon started to diversify from selling just books, audio, and video in July 1999, when it went into consumer electronics and toys.

What is Amazon's diversification strategy? Amazon's strategy is focused on diversification. At its core, Amazon is an online store. The e-commerce business contributes to over 50% of the company's total revenue but a large portion of the revenue comes from supporting third-party businesses to sell on its platform.

Customer loyalty is achieved by its world-class delivery service. Amazon's main strategy is to differentiate itself by developing products and services that meet the needs of its customer segments. The four pillars of Amazon's growth strategy include customer-centricity, innovation, corporate agility, and optimisation.

Unrelated diversification entails a firm entering into a market which is not in any way linked to its current line of business. The entry of Japanese steel firms into personal computers is a classic example of unrelated diversification.

Honda Motor Company provides a good example of leveraging a core competency through related diversification. Although Honda is best known for its cars and trucks, the company started out in the motorcycle business. Through competing in this business, Honda developed a unique ability to build small and reliable engines.

Google Building Laptops: Google, primarily a software company, diversified into hardware with their Chromebook. This is classic related diversification: they leveraged their brand name and reputation to sell their consumers another product that is related but different.

What is an example of Amazon diversification? ›

Amazon was created with the intention of it being a book selling website, but with its success Jeff Bezos diversified it into many different markets to expand his own company. The website is now used to sell/buy apparel, medicine, movies, electronics, and even grocery shopping for some people.

As of 2023, it is the world's largest online retailer and marketplace, smart speaker provider, cloud computing service through AWS, live-streaming service through Twitch, and Internet company as measured by revenue and market share.

Over the years Amazon has evolved from an online book store to an e-commerce giant and finally into a global conglomerate with business interests spanning an array of industries.

Amazon defines diversity as the different races, ethnicities, genders, gender identities, sexual orientations, and abilities, as well as unique skills, experiences, perspectives, cultural backgrounds—and more—that make them who they are as a company.

The company has implemented programs and initiatives aimed at attracting talent from underrepresented groups, such as women, racial minorities, and individuals with disabilities. Additionally, Amazon utilizes blind hiring techniques and diverse interview panels to mitigate bias and ensure fair evaluation of candidates.

Our diverse identities help define who we are as Amazonians

We believe that building a welcoming and inclusive culture is essential to people doing their best work, and what we can achieve as a company.

Coca Cola is one company that has benefited from unrelated diversification. In 1982, Coca Cola acquired Columbia Pictures for $750 million. This diversification paid off seven years later, when Coca Cola sold Columbia Pictures to Sony for $3.4 billion. Unrelated diversification should be pursued with caution.

Unrelated diversification means adding new products or services that are unrelated or dissimilar to your existing ones. For example, a media company might diversify into hospitality, or a pharmaceutical company might diversify into cosmetics.