This Lord is Very Scientific-Chapter 650 - 582 Dialectical Materialism Emerges!
(Anti-theft, posting tomorrow.) Abstract: Accompanied by technological advancement and smart network coverage models, the rise of the gaming industry in recent years is evident to the nation. The dissemination of games is no longer confined to rigid promotional modes; the influence of games has gradually expanded to every facet of life. Correspondingly, gaming companies need to continually integrate resources, innovate and iterate, and improve performance with the rapid development of the era. The diversification strategy perfectly aligns with 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 gaming companies. This paper explains the impact of diversification strategy on gaming company performance, using Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic method adopted by enterprises during operations to occupy more new markets and develop new markets. It is also a strategic plan for enterprises to avoid risks faced in operating a single business and enter new business fields in a targeted and prepared manner. Applying diversification strategy to gaming companies can effectively improve company performance, bringing a process from quantitative change to qualitative change for the development of gaming companies.
1. Macroeconomic Background of Diversification Strategy
Entering 2021, with the country's effective control over the pandemic, people's lives have returned to normal, and the economic and cultural landscape shows a promising recovery. On April 30, 2021, the National Bureau of Statistics published relevant data indicating that the national cultural industry has basically recovered to pre-pandemic levels[1]. This is very favorable news for the gaming industry, which occupies a significant proportion of the cultural industry. Although the pandemic did not significantly impact the gaming industry, the inability to conduct offline activities consistently affects the performance of gaming companies. With the recovery of the cultural industry, this means that for most gaming companies, the great development and prosperity of the cultural industry can promote a sustainable development path[2].
From last year's outbreak to the current stabilization of the pandemic, the country has issued policies from fiscal, institutional, and financial aspects to support the development of the cultural industry. Although the pandemic has halted people's travel, it cannot control the speed of online network communication. The emergence of more and more new media has driven the development of the cultural industry during the pandemic prevention period. However, as enterprises strive to enter the online market, the competitive environment within the cultural industry has become extremely fierce. Many traditional offline enterprises cannot withstand the impact of the pandemic and are eliminated by society at this time. However, in these short two years, many successfully transformed cultural industries have emerged, and most of these enterprises rely on diversification strategy models to accelerate transformation and upgrading. They have also harvested abundantly during the period of significant increase in consumer spending, gaining more diverse development modes and revenue channels, for example, the transformation of Sanqi Mutual Entertainment Company during the pandemic prevention period is worth learning from by most gaming companies[3].
2. Simplified Analysis and Classification of Diversification Strategy
(a) Simplified Analysis of Diversification Strategy
Diversification strategy was proposed by the godfather of strategic management, Igor Ansoff. In his work "What is Corporate Strategy," he mentioned the classification of diversification strategies. This globally influential strategy model is involved in management policy guidelines of multiple countries, so much so that every large and small enterprise today seeks to gain a foothold according to the development mode of diversification strategy[4].
(b) Classification and Meaning of Diversification Strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different models derived from diversification strategy have different meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that can meet new user needs, thus driving market consumption; vertical integration is when enterprises derive vertically based on their development status, utilizing the product chain to infiltrate other market fields and seek new consumers; concentric diversification focuses more on innovation of existing technology, needing new product production within the original production range, realizing transformation through the metamorphosis of existing technology; overall diversification emphasizes expanding operating range changes, enterprises need to connect raw materials and technology related to their products and factors such as the market to expand the operating range[5].
3. Impact of Diversification Strategy on Gaming Company Performance
It can be said that in the operation process of all gaming companies, the impact of diversification strategy on gaming company performance is uniformly divided into two parts: operational mode changes and strategic planning shifts. This transformation gradually produces effects, driving the company's performance improvement. The impact brought by the diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on gaming company performance, taking Sanqi Mutual Entertainment Game Company as an example[6].
(1) Change in Operational Mode
Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is very broad. This is also the advantage brought by the diversification strategy. Company businesses not only involve the operation of interactive entertainment, but also fully handle the development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent development, it has continuously innovated with the technology of the times, expanding the market into film and anime, and also shaping Sanqi Mutual Entertainment Game Company's market cultural industry chain in music, VR technology, and various live broadcasts, and other pan-entertainment businesses.
Sanqi Mutual Entertainment Game Company was founded in 1995, but the early development was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, the industry chain of Sanqi Mutual Entertainment did not involve game and other entertainment industry operations, always at risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. But with poor operations in later stages and market contraction, Sanqi Mutual Entertainment still did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% stake. Although nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed asset restructuring of various industries through multi-faceted collaboration. It is worth mentioning that at this time, the exhibition strategy that Sanqi Mutual Entertainment has always operated was already beginning to show its prowess. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before acquisition to a dual main business listed company paralleling advanced production manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment also underwent changes. The business scope covered by the original cultural creative industry
