Case On Internal and External Scanning And Diversification

A company manufacturing certain well-known brands of malted food, chocolates and biscuits for more than a decade ventured into manufacture of apple juice in 1981, but had to sell off the plant in 1984. During the year 1987, the companys sales were higher by 19 p.c. over the previous year despite new competition. Production of chocolates increased by 14 p.c. and of malted food by 22 p.c. The sale of biscuits was also higher although these were processed by third parties and sold under popular brand names of the company. Having satisfactory financial results in 1987, the company decided to diversify into computer software business. Was it the right strategic decision? What could be the possible reasons underlying the companys decision to diversify into software business?