This Lord is Very Scientific-Chapter 659 - 591: Lin Ke’s Dominator-Level Book Fan
(Anti-theft, will be sent at the time.) Abstract: With the progress of technology and the coverage mode of intelligent networks, the recent rise of the gaming industry is evident to the public. The dissemination methods of games are no longer limited to traditional promotional modes, and their influence is gradually expanding 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. A diversification strategy aptly meets the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, a diversification strategy, being the mode of choice for corporate 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; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy method adopted by enterprises during the operational process to occupy new markets and explore new markets. It is also a strategic plan for enterprises to avoid risks encountered when operating a single business, by targeting and preparing to enter new areas of business. Effectively applying a diversification strategy in gaming companies can significantly improve company performance and bring about a transition from quantitative to qualitative change for the development of gaming companies.
1. Macroeconomic background of diversification strategy
Entering 2021, with strong national control of the pandemic, people's lives are back on track, and the economy and culture are showing a promising recovery trend. On April 30, 2021, according to data announced by the National Bureau of Statistics, the development of the cultural industry nationwide basically returned to pre-pandemic levels[1]. This is very favorable news for the gaming industry, which holds a substantial proportion within the cultural industry. Although the pandemic did not greatly affect the gaming industry, the inability to conduct offline activities always affects the performance of gaming companies. With the culture industry's warming, it means for most gaming companies that the great development and prosperity of the cultural industry can stimulate and promote more gaming companies to embark on a path of sustainable development[2].
Since last year's outbreak of the pandemic to the current pandemic stability, the nation has issued related policies from various aspects like finance, systems, and finance to support the development of the cultural industry. Although the pandemic has hindered people's travel, it cannot control the speed of online network dissemination. More and more new media emerged during the pandemic control period, driving the development of the cultural industry. However, due to various enterprises wanting to squeeze into the online market, the competitive environment within the cultural industry is extremely fierce. Many traditional offline enterprises succumbed to the impact of the pandemic and were eliminated from society. But in these short two years, many successfully transformed cultural industries emerged. These enterprises mostly relied on the diversification strategy model to accelerate transformation and upgrade, and similarly reaped benefits during the epidemic prevention period when resident consumption levels significantly increased, obtaining more diversified development modes and revenue channels. For example, the transformation made by Sanqi Mutual Entertainment Company during the epidemic prevention period is worth learning from by most gaming companies[3].
2. Brief analysis and classification of diversification strategy
(1) Brief analysis of diversification strategy
The diversification strategy was proposed by the founder of strategic management, Igor Ansoff. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategy. This strategically influential mode is involved in the management guidelines and policies of multiple countries, so much so that every enterprise, large or small, seeks a place according to the development mode of diversification strategy today[4].
(2) Classification and meaning of diversification strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The meanings of the four different modes derived from diversification strategy are also different. Horizontal diversification refers to enterprises utilizing 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, based on their development situation, vertically derive and utilize the product industry chain to penetrate other market fields to seek new consumer targets. Concentric diversification focuses more on innovation of existing technologies and requires producing new products within the existing production range. The whole process is achieved through the transformation of existing technologies. Overall diversification emphasizes expanding the range of operations, and enterprises need to contact factors such as raw materials and technologies related to their products, as well as the market, to achieve expansion of the operation 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: change in the operation model and shift in strategic planning. The transformation of these two parts gradually produces effects, driving the improvement of company performance. The impact brought by diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and research the impact of diversification strategy on gaming company performance[6].
(1) Change in the operation model
Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is also due to the advantages brought by diversification strategy. The company not only involves the operation of interactive entertainment, but also fully handles the research and issuance of mobile games and web games under the name of Sanqi Mutual Entertainment Game Company. Moreover, in recent years of development, keeping pace with the times in technology and continuous innovation, it has expanded the market to include layout in film, animation, and ACG (Anime, Comic and Games), and also shaped the market culture industry chain of Sanqi Mutual Entertainment Game Company in music, VR technology, various live broadcasts, and other pan-entertainment businesses. 𝙛𝓻𝒆𝒆𝒘𝙚𝓫𝙣𝙤𝒗𝙚𝓵.𝙘𝙤𝙢
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of the game and other entertainment sectors, always at risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. But due to poor subsequent operations and market contraction, Sanqi Mutual Entertainment ultimately 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 sixty percent of the equity, though nominally acquired, for Sanqi Mutual Entertainment, this was a developmental opportunity worth grasping. The two companies completed asset restructuring of various industries under multi-party cooperation. It is worth mentioning that the strategic operation of Sanqi Mutual Entertainment that it has always operated had begun to show its edge at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition into today's advanced production manufacturing and modern cultural creativity as parallel dual main businesses listed company. Correspondingly, the operating strategy of Sanqi Mutual Entertainment Company is also undergoing changes, the business scope covered by original cultural creative industries.
