Related diversification is a business strategy where a company expands its operations into areas that are connected to its existing products or services. This approach allows the company to leverage its strengths, such as brand reputation or distribution channels, to enter new markets or develop new products that complement its current offerings. For example, a company that produces sports equipment might diversify into athletic apparel or fitness accessories. By doing so, it can attract existing customers while also reaching new ones, ultimately enhancing its overall market presence and profitability.