Unrelated diversification is a business strategy where a company expands its operations into areas that are not related to its existing products or services. This approach allows firms to enter new markets and reduce risks by spreading their investments across different industries. For example, a company that primarily manufactures electronics might diversify by acquiring a food company. This strategy can provide opportunities for growth and profitability, as it enables businesses to tap into new customer bases and revenue streams. However, unrelated diversification also poses challenges, such as the need for different expertise and management skills in unfamiliar markets.