This Lord is Very Scientific-Chapter 668 - 600
(Anti-theft, will be sent later.) Abstract: Accompanied by the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years is evident to everyone. The dissemination methods of games are no longer limited to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate iterations, and improve performance in line with the rapid development of the times. The diversification strategy perfectly caters to the planning needs and development goals within the game industry. Under the backdrop of economic globalization, diversification strategy as the preferred mode of enterprise development is equally applicable to game companies. This article explains the impact of diversification strategy on the performance of game companies using Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Game companies; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy tool adopted by enterprises in the process of operation to capture a larger share of new markets and develop new markets. It is also a strategic planning adopted to avoid the risks encountered in operating a single business and systematically enter new business fields. Applying diversification strategy to game companies can effectively improve company performance, bringing about a process of transformation from quantitative change to qualitative change in the development of game companies.
1. Macro Background of Diversification Strategy
Entering 2021, with the strong control of the pandemic by the country, people's lives have returned to normal, and economic culture is also showing a great recovery trend. On April 30, 2021, according to the data released by the National Bureau of Statistics, the development of the national cultural industry basically recovered to the pre-pandemic level [1]. This is very favorable news for the game industry, which accounts for a large proportion of the cultural industry. Although the arrival of the pandemic did not cause great impact on the game industry, the inability to conduct offline activities has always affected the performance of game companies. With the recovery of the cultural industry, for most game companies, this means 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
Since the outbreak of last year's pandemic to the current stable situation, the country has introduced relevant policies from fiscal, institutional, financial, and other aspects to support the development of the cultural industry. Although the pandemic has hindered people from traveling, it cannot control 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 prevention and control period. However, since enterprises all want to enter the online market, the competitive environment within the cultural industry has become very fierce. During this time, many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. However, within these two short years, many successfully transformed cultural industries have emerged. Most of these enterprises rely on diversification strategy models to accelerate transformation and upgrade, and during the pandemic prevention and control period when residents' consumption levels have significantly increased, they also achieved substantial gains, obtaining diversified development models and funding channels, such as the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention and control period, which is worth following by most game companies [3].
2. Brief Analysis and Classification of Diversification Strategy
(1) Brief Analysis of Diversification Strategy
Diversification strategy was proposed by Igor Ansoff, the father of strategic management. In his book "Corporate Strategy: An Analytical Approach to Business Policy for Growth and Expansion," he mentioned the classification of diversification strategy. This world-influencing strategic model is involved in the management guidelines and policies of multiple countries, so today every enterprise, large and small, is seeking a position following the development model of diversification strategy [4].
(2) Classification and Meaning of Diversification Strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different models derived from diversification strategy have distinct meanings. Horizontal diversification refers to enterprises utilizing the original conditions provided by the market to produce new products that meet new user needs, which in turn drives market consumption. Vertical integration is when enterprises vertically derive according to their own development situations, utilizing the product industry chain to penetrate other market fields to seek new consumer targets. Concentric diversification pays more attention to innovation of existing technologies, requiring production of new products within the original production range, and the whole process is realized through the transformation of existing technologies. Conglomerate diversification pays more attention to the expansion of the range of operations, requiring enterprises to connect factors such as raw materials and technologies related to their own products and the market to expand the range of operations [5].
3. The Impact of Diversification Strategy on Game Companies' Performance
It can be said that in the operation process of all game companies, the impact of diversification strategy on game companies' performance is uniformly divided into two parts: changes in operating modes and shifts in strategic planning. From these two parts of change, the effect gradually arises to drive the performance improvement of companies. The impact brought by diversification strategy is multi-faceted. This paper will analyze and study the impact of diversification strategy on game companies' performance using Sanqi Mutual Entertainment Game Company as an example [6].
(1) Changes in Operating Modes
Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is very broad. This is also reliant on the advantages brought by the diversification strategy. The company's business involves not only the operation of interactive entertainment but also the research and development and distribution of mobile games and webpage games under Sanqi Mutual Entertainment Game Company. In recent years, it has followed the technology of the times and constantly innovated to widen the market to include film and animation second-dimensional setups, and also shapes Sanqi Mutual Entertainment Game Company's market cultural industry chain in music, VR technology, and various live broadcast and other pan-entertainment businesses.
Sanqi Mutual Entertainment Game Company was founded in 1995, but the development path in the early stage was not smooth. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise, and initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of the game and other entertainment industries, with the constant risk of being merged by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. However, accompanied by poor operation and market contraction in later stages, Sanqi Mutual Entertainment ultimately had not escaped the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the shares of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, this was an opportunity worth seizing for development. The two companies completed asset restructuring of various industries through multi-party collaboration. It is worth mentioning that the strategy operated by Sanqi Mutual Entertainment has already begun to show its edge. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creativity company before being acquired to today's advanced manufacturing and modern cultural creativity parallel dual main business listed company. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment also underwent change, with the business scope covered by the previous cultural creativity industry.
