This Lord is Very Scientific-Chapter 649 - 581: New Book Release! "Logic"!
(Anti-theft, posted at night.) Abstract: With the advancement of technology and the coverage model of smart networks, the rise of the gaming industry in recent years has been evident to the public. The ways of spreading games are no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate, and update to improve performance, in line with the rapid development of the times. The diversification strategy just fits the planning needs and development goals within the gaming industry. Under the background of economic globalization, the diversification strategy, as the preferred mode of enterprise development, is equally applicable to game companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of game companies.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy means adopted by enterprises to occupy new markets and explore new markets more during operation, and is also a strategic plan used to avoid risks encountered in the operation of a single business and to enter new business fields with targeted preparation. Applying diversification strategy to game companies can effectively improve company performance and bring about a process of transformation from quantitative to qualitative change in the development of game companies.
1. The 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 economy and culture also show a good situation of 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 recovered to pre-pandemic levels [1]. For the gaming industry, which occupies a large proportion within the cultural industry, this is very favorable news. Although the arrival of the pandemic did not greatly affect the gaming industry, the inability to carry out offline activities always impacts the performance of game companies. Through the warming up of the cultural industry, for most game companies, this means that the great development and prosperity of the cultural industry can promote more game companies to embark on a path of sustainable development [2].
From the outbreak of the pandemic last year to the current pandemic stabilization, the state issued relevant policies from multiple aspects such as finance, system, and finance to support the development of the cultural industry. Although the pandemic has thwarted people's travel, it cannot control the speed of online network dissemination. Increasingly, more new media have emerged, driving the development of the cultural industry during the pandemic prevention and control period. However, as enterprises all want to squeeze into the online market, the competitive environment among cultural industries is very intense. Many traditional offline enterprises have been eliminated by society due to the impact of the pandemic. But within just two years, many successful transformation cultural industries have emerged, most relying on the diversification strategy model to accelerate transformation and upgrade. During the pandemic prevention and control period, this also resulted in considerable gains due to significant increases in resident consumption levels, achieving more diverse development modes and income channels. For instance, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention and control period is worth imitation by most game companies [3].
2. Simplified analysis and classification of diversification strategy
(a) Simplified analysis of diversification strategy
Diversification strategy was proposed by the ancestor of strategic management, Igor Ansoff, who mentioned the classification of diversification strategy in his book "What is Corporate Strategy". This strategic model influential worldwide is involved in management policies and policies in multiple countries, so today every large and small enterprise is seeking a place according to the development model of diversification strategy [4].
(b) Classification and implications of diversification strategy
There are four types of diversification strategy: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different mode implications derived from the diversification strategy also differ from each other. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet users' new needs, thereby driving market consumption; vertical integration refers to enterprises developing vertically based on their own development situation, using product industry chain penetration into other market fields to seek new consumer objects; concentric diversification places more emphasis on innovation of existing technology, requiring new product production within the original production scope, achieving transformation through the metamorphosis of existing technology; overall diversification places more emphasis on changes in operating range extension, enterprises need to connect with raw materials, technology, market, and other factors related to their own products to expand the operating range [5].
3. The impact of diversification strategy on the performance of game companies
It can be said that during the operation of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: change in operating mode and shift in strategic planning. From these two parts, from changes gradually generating effects to drive company performance improvement, the impact brought by diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze the impact of diversification strategy on the performance of game companies [6].
(1) Change in operating mode
Currently, the main operating range of Sanqi Mutual Entertainment Game Company is very broad, 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 covers the development and issuance of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years, keeping pace with technological advancements, it has continuously innovated, expanding the market to layout films and anime in the 'second dimension', and also sculpting its own market cultural industry chain within pan-entertainment businesses such as music, VR technology, and various broadcasts.
In 1995, Sanqi Mutual Entertainment Game Company was established, but the early development road was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise that didn't involve the operation of games and other entertainment industries in its industrial chain, and was at risk of being swallowed by the market at any time. However, relying on steady development in the single industry, Sanqi Mutual Entertainment Company went public in 2011. Yet with poor operation and market contraction at a later stage, Sanqi Mutual Entertainment eventually couldn't escape being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with 60% equity, despite being nominally acquired. For Sanqi Mutual Entertainment, this was a development opportunity worth seizing. Through multi-party collaboration between the two companies, all industry asset restructuring was completed. Notably, Sanqi Mutual Entertainment's exhibition strategy, which has always been operated, was beginning to show its sharpness. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before being acquired to nowadays a dual-main business listed company of advanced production manufacturing and modern cultural creativity. Correspondingly, the operation strategy of Sanqi Mutual Entertainment Company was also undergoing changes, and the business scope covered by the original cultural creative industry...
