This Lord is Very Scientific-Chapter 634 - 566 Knicks Takes a Disciple
(Anti-theft, released at night.) Abstract: Accompanied by technological advancements and the coverage model of smart networks, the rise of the gaming industry in recent years is evident to the public. The mode of dissemination for games is no longer confined to rigid promotional methods, and the influence of games has gradually expanded to all aspects of life. Correspondingly, gaming companies need to continuously integrate resources, innovate and iterate, and improve performance in line with the rapid development of the times. The diversification strategy precisely caters to the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred mode of enterprise development, is equally applicable to gaming companies. This article elucidates the impact of diversification strategy on gaming companies' performance, using Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Gaming companies; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic approach used by enterprises to capture and develop new markets during their operations. It is also a strategic plan adopted by enterprises to effectively enter new business fields to avoid the risks encountered during the operation of a single business. The practical application of diversification strategy in gaming companies can effectively improve company performance and bring about a transformation in the development of gaming companies from quantitative to qualitative change.
1. The Macro Background of Diversification Strategy
Entering 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economic culture has shown a prosperous recovery. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to pre-pandemic levels[1]. This is extremely favorable news for the gaming industry, which holds a significant share in the cultural industry. Although the pandemic has not severely affected the gaming industry, the inability to conduct offline activities has always impacted gaming companies' performance. The revival of the cultural industry means that the great development and prosperity of the cultural industry can drive more gaming companies onto the path of sustainable development for most gaming companies[2].
From the outbreak of the pandemic last year to the current stabilization, the state has introduced relevant policies from fiscal, institutional, financial, and other aspects to support the development of the cultural industry. While the pandemic has hindered people's travel, it could not control the speed of online network dissemination. More and more new media have emerged, driving the development of the cultural industry during the pandemic prevention and control period. However, the eagerness of various enterprises to enter the online market has led to a highly competitive environment within the cultural industry. Many traditional offline enterprises have been eliminated by society due to the pandemic's impact. Still, numerous cultural industries have successfully transformed in this brief two-year period. These enterprises have accelerated their transformation and upgrades, relying mainly on diversification strategy modes, and have gained diversified development models and revenue channels during the pandemic prevention and control period when residents' consumption levels were significantly elevated. For example, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention and control period is worthy of reference for most gaming companies[3].
2. A Brief Analysis and Classification of Diversification Strategy
(1) A Brief Analysis of Diversification Strategy
Diversification strategy was proposed by the father of strategic management, Igor Ansoff, in his book "Corporate Strategy". The classification of diversification strategy mentioned in this influential strategic mode is involved in the governance policies of multiple countries, so much so that every enterprise, large or small, today seeks a foothold following the development model of diversification strategy[4].
(2) Classification and Meaning of Diversification Strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different modes derived from the diversification strategy have distinct meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user demands, thus driving market consumption. Vertical integration is when enterprises derive vertically based on their development situation, penetrating other market fields with the product industry chain to seek new consumer targets. Concentric diversification emphasizes the innovation of existing technology, requiring new product production within the existing production range, implemented through the transformation of original technology. Conglomerate diversification focuses more on the expansion and change of the business scope. Enterprises need to connect with factors related to their products, such as raw materials, technology, and the market, to expand the business scope[5].
3. The Impact of Diversification Strategy on Gaming Companies' Performance
In the operational processes of all gaming companies, it can be said that the impact of diversification strategy on gaming companies' performance is uniformly divided into two parts: alteration of operational mode and shift of strategic planning. The effects gradually generated from these two parts lead to the enhancement of company performance. The influence brought about by diversification strategy is multifaceted. This paper will analyze and research the impact of diversification strategy on gaming companies' performance using Sanqi Mutual Entertainment Game Company as an example[6].
(1) Change in Operational Mode
As of now, the primary operational scope of Sanqi Mutual Entertainment Game Company is extensive, which is attributed to the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also the development and distribution of mobile games and web games are wholly handled by Sanqi Mutual Entertainment Game Company. Moreover, in recent years, it has continuously innovated in line with the era's technology, expanding the market to include film and animation in the second dimension, while also shaping the market culture industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live entertainment businesses.
Established in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth development path initially. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and the industry chain of Sanqi Mutual Entertainment initially did not involve the operation of the gaming and entertainment industries, continuously facing the risk of being swallowed by the market. However, relying on the stable development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. Yet, due to poor late-stage operations and market contraction, Sanqi Mutual Entertainment eventually could not evade being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% equity stake. Despite nominally being acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed asset reorganization of various industries through collaborative efforts. Notably, the development strategy consistently operated by Sanqi Mutual Entertainment was already beginning to take shape. Sanqi Mutual Entertainment Company transformed from a single modern cultural creativity company before the acquisition into today's dual-main business listed company combining advanced manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment has also been undergoing changes, with the business scope covered under the original cultural creativity industry... 𝚏𝕣𝐞𝗲𝐰𝕖𝐛𝐧𝕠𝕧𝚎𝚕.𝐜𝚘𝗺
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