This Lord is Very Scientific-Chapter 631 - 563: The Minotaur Race’s Superb Specialty!
(Anti-theft, post in the evening.) Summary: With the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years is evident to the populace. The methods of game dissemination are no longer confined to rigid promotional modes, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, and upgrade to enhance performance with the rapid development of the times. The diversification strategy aptly meets the planning needs and development goals within the game industry. Under the backdrop of economic globalization, diversification strategy, as a preferred mode of business development, is also applicable to game companies. This article explains the impact of diversification strategy on the performance of game companies using Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic means that enterprises adopt during their operations to gain more hold over new markets and expand into new markets. It is also a strategic plan used by enterprises to avoid risks encountered in the process of operating a single business, with targeted and well-prepared entry into new fields of business. Applying the diversification strategy practically in game companies can effectively improve company performance, bringing about a transformation from quantitative to qualitative growth for the development of game companies.
1. Macro background of diversification strategy
Entering 2021, under the effective control of the pandemic by the state, people's lives have returned to normal, and the economic culture shows a great recovery trend. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has largely recovered to pre-pandemic levels [1]. This is very favorable news for the game industry, which accounts for a significant portion of the cultural industry. Although the arrival of the pandemic did not greatly affect the game industry, the inability to conduct offline activities always impacts the performance of game companies. With the warming up of the cultural industry, this means, for most game companies, that the great development and prosperity of the cultural industry can promote the continuous development path for more game companies [2].
From the outbreak of the pandemic last year to the stable period now, the state has issued relevant policies in multiple aspects such as finance, systems, and finance to support the development of the cultural industry. Although the pandemic blocked people's travel steps, it could not control the spread speed of the online network. More and more new media have emerged, driving the development of the cultural industry during the pandemic prevention. However, since many enterprises want to squeeze into the online market, the competition environment among cultural industries is very fierce. Many traditional offline enterprises have been eliminated by society under the influence of the pandemic, but during these short two years, many successful transformed cultural industries have emerged. These enterprises mostly rely on the diversification strategy to accelerate transformation and upgrading, reaping substantial gains during the pandemic prevention period when residents' consumption levels are significantly increased, obtaining more diversified development modes and income channels. For instance, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention period is worth emulating by most game companies [3].
2. Brief analysis and classification of diversification strategy
(I) Brief analysis of diversification strategy
Diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff. In his work "What is Corporate Strategy," he mentioned the classification of diversification strategy. This world-impacting strategic model is involved in management policies of multiple countries, so much so that today every large and small enterprise is seeking a place according to the development model of diversification strategy [4].
(II) Classification of diversification strategy and its meaning
Diversification strategy is categorized into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. Each of the four different modes derived from diversification strategy has different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user needs, thus driving market consumption. Vertical integration refers to enterprises developing vertically according to their own development situations, penetrating into other market fields with the product industry chain to seek new consumer objects. Concentric diversification emphasizes innovation of the existing technology, requiring the production of new products within the existing production scope, with the entire process realized through the transformation of existing technology. Overall diversification focuses more on expanding the scope of operations, requiring enterprises to connect raw materials, technology, and market factors related to their own products to expand the scope of operations [5].
3. Impact of diversification strategy on the performance of game companies
It can be said that in the operations of all game companies, the impact of diversification strategy on the performance of game companies is divided into two parts: changes in the operational mode and the transfer of strategic planning. From the effects gradually generated by changes in these two parts, the performance of the company is improved. The impacts brought by the diversification strategy are multifaceted. This paper will focus on Sanqi Mutual Entertainment Game Company to analyze and study the impact of diversification strategy on the performance of game companies [6].
(1) Changes in operational mode 𝒻𝘳ℯℯ𝑤ℯ𝒷𝘯ℴ𝓋ℯ𝘭.𝑐ℴ𝑚
At present, the main operational scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also due to the advantages brought by diversification strategy. The company's business not only involves the operation of interactive entertainment but also encompasses the development and publication of mobile games and web games under the umbrella of Sanqi Mutual Entertainment Game Company. Moreover, in recent years' development, keeping pace with technological advancements, it has continuously innovated, broadening the market to include film and animation layouts in the second dimension, and also shapes its market cultural industry chain in various entertainment businesses such as music, VR technology, and all kinds of live streaming.
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, Sanqi Mutual Entertainment's industry chain did not involve the operation of game and other entertainment industries, always with the risk of being annexed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. Yet with subsequent poor operations and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was nominally acquired, for Sanqi Mutual Entertainment, this was an opportunity worth seizing for development. The two companies completed asset restructuring of various industries under multi-party collaboration. It is worth mentioning that the exhibition strategy consistently operated by Sanqi Mutual Entertainment has started to shine at this time, transforming from a single modern cultural creative company before acquisition to a dual main business listed company of advanced production manufacturing and modern cultural creativity running in parallel. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment is also changing, with the business scope covered by the original cultural creative industry.
