Chapter 6

Amazon is a great example of how a company can grow by expanding into related areas that build on its strengths. Originally an online bookstore, Amazon has used its strong technology, customer service, and delivery systems to move into many other businesses, like cloud computing (Amazon Web Services), grocery stores (Whole Foods), streaming (Prime Video), and smart devices (Alexa). This strategy is called related diversification, and it helps Amazon save money and offer more value by sharing resources across different parts of the company. By owning more parts of its supply chain, like warehouses and delivery trucks, Amazon also has more control and can serve customers better. Chapter 6 explains that companies succeed with this kind of strategy when they build on what they already do well, and Amazon is a clear example of that approach working effectively.