This Lord is Very Scientific-Chapter 654 - 586 "Robinson Crusoe
(Anti-theft, to be published later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the recent rise of the gaming industry has been evident to the public, and the way games are spread is no longer confined to rigid promotional models. The influence of games has gradually expanded to all aspects of life, and corresponding gaming companies need to continuously integrate resources, innovate and update, and improve performance in line with the rapid development of the times. Diversification strategy perfectly aligns with the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as a preferred mode of corporate development, is equally applicable to gaming companies. This article explains the impact of the diversification strategy on the performance of gaming companies using Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy approach adopted by enterprises to capture more and new markets during the operation process. It is also a strategic planning method used by enterprises to avoid risks encountered during the operation of a single business and to enter new business fields with targets and preparation. Applying the diversification strategy to gaming companies can effectively improve company performance and lead to the transformation from quantitative change to qualitative change in the development of gaming companies.
1. 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 also presents a promising 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 accounts for a large proportion of the cultural industry, this is very favorable news. Although the arrival of the pandemic did not greatly affect the gaming industry, the inability to conduct offline activities always affected the performance of gaming companies. Through the warming of the cultural industry, for most gaming companies, this means that the great development and prosperity of the cultural industry can promote more gaming companies to embark on a path of sustainable development [2].
From last year's outbreak of the pandemic to the current stability, the country has issued relevant policies to support the development of the cultural industry from multiple aspects such as finance, institution, and finance. Although the pandemic has hindered people's travel, it has not controlled the speed of online network dissemination. The emergence of more and more new media has driven the development of the cultural industry during the pandemic control period. However, due to the desire of various enterprises to enter the online market, the competitive environment within the cultural industry is very intense. Many traditional offline enterprises failed to withstand the impact of the pandemic and were eliminated by society, but during this short span of two years, many cultural industries successfully transformed. Most of these enterprises accelerated transformation and upgrading relying on the diversification strategy model, and during the pandemic control period with significantly increased resident consumption levels, they also gained substantial rewards, obtaining more diversified development models and channels of income. For example, the transformation Sanqi Mutual Entertainment Company underwent during the pandemic control period is worth emulating by most gaming companies [3].
2. Brief Analysis and Classification of Diversification Strategy
(a) Brief Analysis of Diversification Strategy
Igor Ansoff, the founder of strategic management, proposed the diversification strategy. In his book "Corporate Strategy," he mentioned the classification of the diversification strategy. This world-influencing strategic model is involved in the 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 the diversification strategy [4].
(b) Classification and Meaning of Diversification Strategy
The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and comprehensive diversification. The four different modes derived from the diversification strategy each 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, thereby driving market consumption; vertical integration is where enterprises, according to their own development, vertically derive and penetrate their product industry chain into other market fields to seek new consumers; concentric diversification focuses more on the innovation of existing technologies, requiring the production of new products within the existing production range. The whole process is achieved through the metamorphosis of existing technology; comprehensive diversification focuses more on changes in the expansion of the business scope. Enterprises need to expand their business scope by linking raw materials and technologies related to their own products as well as market factors [5].
3. Impact of Diversification Strategy on the Performance of Gaming Companies
It can be said that in the operation process of all gaming companies, the impact of the diversification strategy on gaming company performance is uniformly divided into two parts: the change of operation mode and the transfer of strategic planning. The effects gradually emerge from these two parts, driving the improvement of company performance. The impact brought by the diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of the diversification strategy on gaming company performance [6].
(1) Change of Operation Mode 𝒻𝑟ℯℯ𝑤𝑒𝑏𝑛𝘰𝓋𝑒𝓁.𝒸𝑜𝘮
Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is extremely broad. This is also relying on the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also fully undertakes the research and publication of mobile games and web games under Sanqi Mutual Entertainment Game Company. Moreover, in recent years, it has kept pace with the technology of the times with continuous innovation, expanding the market to the layout of film and animations in the second dimension. It is also shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in areas like music, VR technology, and various live streaming and other pan-entertainment businesses.
In 1995, Sanqi Mutual Entertainment Game Company was established, but the development path during the early years was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, Sanqi Mutual Entertainment's industry chain did not involve the operation of entertainment industries like games, facing the risk of market absorption at any time. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company got listed in 2011. But with poor operations in the later stages and a tightening market, Sanqi Mutual Entertainment eventually could not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd.'s shares. Despite being acquired in name, for Sanqi Mutual Entertainment, this was an opportunity for development worth seizing. The two companies completed the restructuring of assets in various industries through multi-party collaboration. It is worth mentioning that the strategy that Sanqi Mutual Entertainment has always operated started to show its edge at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company prior to acquisition to a dual-main business listed company of advanced manufacturing and modern cultural creativity in parallel. Correspondingly, Sanqi Mutual Entertainment's company operation strategies were also undergoing changes, and the business scope covered by the original cultural creative industry...
