Answer :
The answer to the student's question is 'unrelated diversification,' due to the automotive repair shop owner opening a pizza restaurant, which is an entirely different industry. Thus, the correct answer is E. Unrelated diversification.
The situation described where the owner of Bob's Tire and Oil decides to open a pizza restaurant next to the repair shop represents unrelated diversification. This is because the automotive repair business and a pizza restaurant operate in completely different industries with distinct value chains. Unlike horizontal integration where a company expands within the same industry, or vertical integration where a company expands into different stages of the same value chain, unrelated diversification sees a company branching out into an entirely new line of business. Thus, the correct answer is E. Unrelated diversification.
