This Lord is Very Scientific-Chapter 635 - 567: The Black Rabbit People’s Confinement Rule
(Anti-theft, posted at night.) Abstract: Accompanied by the advancement of technology and the coverage mode of intelligent networks, the rise of the gaming industry in recent years has been evident to the public. The way games spread is no longer confined to stereotypical promotion methods, and the influence of games has gradually expanded to all aspects of life. Accordingly, game companies also need to continually integrate resources, innovate updates, and improve performance to keep pace with the rapid development of the times. The diversification strategy aptly meets the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as the first-choice model for enterprise development, is equally applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment
Diversification strategy is a market strategic method adopted by enterprises during the operation process to occupy new markets and develop more markets. It is also a strategic plan for enterprises to avoid risks encountered during the operation of a single business by targeted and prepared entry into new business fields. Utilizing diversification strategies in game companies can effectively improve the company's performance and bring about a process of transition from quantitative change to qualitative change in the development of game companies.
1. Macroscopic background of diversification strategy
Entering into 2021, with the effective control of the pandemic by the state, people's lives are back on track, and the economic culture shows a great recovery trend. On April 30, 2021, according to the relevant data published by the National Bureau of Statistics, the development of the national cultural industry basically recovered to the pre-pandemic level[1], which is very favorable news for the gaming industry that holds a significant proportion in the cultural industry. Although the arrival of the pandemic did not severely impact the gaming industry, the inability to conduct offline activities has always affected the performance of game companies. The recovery of the cultural industry indicates to most game companies that the grand development and prosperity of the cultural industry can promote and drive more game companies onto the path of sustainable development[2].
From the outbreak of the pandemic last year to the current stable pandemic situation, the state has promulgated relevant policies from various aspects such as finance, system, and financial support to aid the development of the cultural industry. Although the pandemic hindered people from traveling, it couldn't control the speed of online network spread. More and more new media have emerged, driving the cultural industry development during the pandemic prevention period. However, as enterprises compete to enter the online market, the competition environment within the cultural industry has become fierce. Numerous traditional offline enterprises couldn't withstand the impact of the pandemic and were socially eliminated at this time, but many successfully transformed cultural industries emerged during these short two years. Most of these enterprises accelerated transformation and upgrades relying on the diversification strategy model, harvesting plentiful benefits during the pandemic prevention period when residents' consumption levels significantly improved, gaining more diversified development models and income channels. For instance, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth learning from for most game companies[3].
2. Brief analysis and classification of diversification strategy
(1) Brief analysis of diversification strategy
Diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff, in his book "What Is Corporate Strategy," where he mentioned the classification of diversification strategy. This globally influential strategic model has been involved in management policies and guidelines in various countries, leading every enterprise, big and small, to seek a foothold according to the diversification strategy development model today[4].
(2) Classification and meaning of diversification strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and holistic diversification. The four different modes derived from diversification strategy have distinct meanings. Horizontal diversification refers to the enterprise using the original conditions provided by the market to produce new products that meet new user needs, thereby driving market consumption. Vertical integration is when enterprises vertically derive according to their own development situation, using the product industry chain to penetrate other market fields to seek new consumer targets. Concentric diversification focuses more on innovation in existing technology, requiring the production of new products within the existing production range, realizing the whole process through the transformation of existing technology. Holistic diversification places more emphasis on expanding the scope of operation change; enterprises need to relate to raw materials, technology, and market factors related to their own products to expand the scope of operation[5].
3. The impact of diversification strategy on the performance of gaming companies
It can be said that in the operation process of all game companies, the impact of diversification strategy on the performance of game companies is uniformly divided into two parts: the change of operating mode and the shift of strategic planning. From the transformation of these two parts, effects gradually emerge, driving the performance improvement of the company. The impact brought by diversification strategy is multifaceted; this paper will analyze and study the impact of diversification strategy on game companies' performance with Sanqi Mutual Entertainment Game Company as an example[6].
(1) Change of operating mode
Currently, looking at Sanqi Mutual Entertainment Game Company's main operating range is very broad; this is also due to the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company also undertakes the research and development and distribution of mobile games and web games, and in recent years' development, it continuously innovates closely following technological trends, expanding the market layout to film and animation ACG (Anime, Comics, Games), and molds the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music and VR technology and various live streaming and other pan-entertainment business.
In 1995, Sanqi Mutual Entertainment Game Company was founded, but the development road in the early stage was not smooth sailing. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise, at first, Sanqi Mutual Entertainment's industry chain did not involve the operation of games and other entertainment industries, always facing the risk of being swallowed by the market. But relying on stable development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011, yet accompanied by poor later-stage operation and market tightening, Sanqi Mutual Entertainment eventually couldn't escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed the asset restructuring of various industries through multi-party collaboration. It is worth mentioning that the exhibition strategy that Sanqi Mutual Entertainment has always operated has already shown signs of success at this time; Sanqi Mutual Entertainment Company transformed from a single modern cultural and creative company before the acquisition to a dual-main business listed company that simultaneously engages in advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operating strategy is also undergoing changes, and the scope of business covered by the original cultural creative industry...
