This Lord is Very Scientific-Chapter 660 - 592
(Prevent theft, will release at the right time.) Abstract: With the advancement of technology and the coverage model of the smart network, the rise of the gaming industry in recent years is evident to the public. The dissemination method of games is 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 as the era rapidly evolves. A diversification strategy perfectly caters to the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy as the preferred mode of enterprise development is also applicable to game companies. This paper uses Sanqi Mutual Entertainment Company as an example to explain the impact of the diversification strategy on the performance of game companies.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment Company
The diversification strategy is a market strategy method adopted by enterprises to occupy and develop new markets to avoid risks encountered in operating a single business. It is a strategic plan for targeted and prepared entry into new business areas. Applying the diversification strategy to game companies can effectively improve company performance, bringing a process of quantitative to qualitative change in the development of game companies.
1. Macro Background of Diversification Strategy
Stepping into 2021, under the country's strong control of the pandemic, people's lives returned to normal, and the economy and culture showed a promising recovery. On April 30, 2021, data released by the National Bureau of Statistics showed that the national cultural industry development had basically recovered to pre-pandemic levels[1]. This is very favorable news for the gaming industry, which holds a large share in the cultural industry. Although the pandemic did not greatly impact the gaming industry, the inability to conduct offline activities has always affected game company performance. With the warming of the cultural industry, this means, for most game companies, that the great development and prosperity of the cultural industry can promote and drive more game companies onto the path of sustainable development[2]. 𝓯𝙧𝓮𝓮𝒘𝓮𝙗𝙣𝒐𝒗𝒆𝓵.𝓬𝓸𝒎
From the outbreak of the pandemic last year to the current stability, the country has issued relevant policies from various aspects such as finance, regulations, and finance to support the development of the cultural industry. Though the pandemic halted people's travel, it couldn't control the speed of online network dissemination. More and more new media appeared, driving the development of the cultural industry during the pandemic prevention period. But because each company wants to squeeze into the online market, the competitive environment within the cultural industry has become intense. Many traditional offline enterprises couldn't withstand the pandemic's impact and were eliminated by society. However, in these two short years, many successfully transformed cultural industries have emerged, mostly relying on the diversification strategy model to accelerate transformation and upgrading, and during the pandemic prevention period, when residents' consumption levels significantly increased, they also reaped considerable benefits, gaining more diverse development models and sources of income. For example, Sanqi Mutual Entertainment Company's transformation during the pandemic prevention period is worth referencing for most game companies[3].
2. Brief Analysis and Classification of Diversification Strategy
(1) Brief Analysis of Diversification Strategy
The diversification strategy was proposed by Igor Ansoff, the father of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This globally influential strategic model is involved in management policies in many countries, so much so that today every large and small enterprise is seeking a place for itself following the development model of a diversification strategy[4].
(2) Classification and Implication of Diversification Strategy
The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different models derived from the diversification strategy have distinct meanings. Horizontal diversification refers to an enterprise using the original conditions provided by the market to produce new products that meet new user needs, thereby driving market consumption. Vertical integration involves an enterprise deriving vertically based on its development status, using the product industry chain to penetrate other market fields seeking new consumer targets. Concentric diversification emphasizes innovation in existing technology, requiring new product production within the existing production scope, and the entire process is achieved through the metamorphosis of existing technology. Conglomerate diversification focuses more on expanding the business scope, requiring enterprises to connect related raw materials, technology, and market factors with their products to expand the business scope[5].
3. Impact of Diversification Strategy on Game Company Performance
It can be said that in the operation process of all game companies, the impact of the diversification strategy on game company performance is uniformly divided into two parts: changes in the operation model and shifts in strategic planning. These two parts gradually produce effects, driving the improvement of company performance. The impact of the diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and research the impact of the diversification strategy on game company performance[6].
(1) Change in Operation Model
At present, the main operating scope of Sanqi Mutual Entertainment Game Company is very extensive. This is also the advantage brought by the diversification strategy. The company's business is not only involved in interactive entertainment operations; Sanqi Mutual Entertainment Game Company also fully undertakes the research and publication of mobile games and web games. In recent developments, it continues to innovate in line with the times and technology, expanding the market to include film and television and anime second dimensions, and also creates its market cultural industry chain in music, VR technology, and various live broadcasts and other pan-entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but the development path in the early stages was not smooth. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise. Initially, Sanqi Mutual Entertainment's industry chain did not involve the operation of games and other entertainment industries, always at risk of being absorbed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. But accompanied by poor operation and market contraction in the later stages, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Sanqi Mutual Entertainment Technology Co., Ltd. with 60% equity. Although ostensibly acquired, this was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed the asset restructuring of various industries through multi-party cooperation. It is worth mentioning that the strategy that Sanqi Mutual Entertainment has always operated on began to show promise at this time. The company transformed from a single modern cultural creative company before the acquisition to a dual-main business listed company with advanced manufacturing and modern cultural creativity in parallel. Correspondingly, Sanqi Mutual Entertainment's company operation strategy is also undergoing changes; the business scope covered by the original cultural creative industry...
