This Lord is Very Scientific-Chapter 673 - 605
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(Anti-theft, to be released later.) Abstract: With the advancement of technology and the coverage mode of intelligent networks, the rise of the gaming industry in recent years has been evident to the public. The dissemination methods of games are 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 iterate, and improve performance with the rapid development of the times. The 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 the preferred mode for corporate development, is equally applicable to game companies. This paper uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of game companies.
Keywords: Diversification strategy; Game companies; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic means adopted by enterprises in their operation processes to capture more and explore new markets. It is also a strategic plan used by enterprises to avoid the risks encountered in operating a single business by entering new fields of business with targeted and prepared strategies. The practical application of diversification strategy to game companies can effectively improve company performance and bring a qualitative change process to the development of game companies.
1. The Macro Background of Diversification Strategy
Entering 2021, under the strong control of the epidemic by the state, people's lives have returned to normal, and the economic and cultural landscape has shown a favorable recovery trend. On April 30, 2021, according to the relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically recovered to the pre-epidemic level [1]. This is very good news for the gaming industry, which occupies a large proportion of the cultural industry. Although the arrival of the epidemic did not cause much impact on the gaming industry, the inability to conduct offline activities has always affected the performance of game companies. The warming of the cultural industry means that for most game companies, the great development and prosperity of the cultural industry can promote more game companies to embark on the path of sustainable development [2].
From the outbreak of last year's epidemic to the current stabilization, the state has issued relevant policies from multiple aspects such as finance, systems, and finance to support the development of the cultural industry. Although the epidemic has hindered people's travel, it cannot control the speed of online network dissemination. The emergence of more and more new media during the epidemic prevention period has driven the development of the cultural industry. However, due to each enterprise wanting to enter the online market, the competitive environment among the cultural industry is very fierce. Many traditional offline enterprises could not withstand the impact of the epidemic and were eliminated by society at this time. However, in these short two years, many successfully transformed cultural industries have emerged, and most of these enterprises have accelerated transformation and upgrading by relying on the diversification strategy model. During the epidemic prevention period, when the level of resident consumption increased significantly, they also harvested a lot, obtaining more diversified development modes and channels for financial income. For example, the transformation made by Sanqi Mutual Entertainment Company during the epidemic prevention period is worth learning 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 pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model is involved in the management policies of many countries, so much so that today, enterprises large and small are seeking a place according to 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 overall diversification. The four different modes 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 demands, thereby driving market consumption; vertical integration is when enterprises, based on their development, derive vertically and penetrate into other market fields through the product industry chain to seek new consumers; concentric diversification focuses more on the innovation of existing technology and requires the production of new products within the original production scope, the whole process is achieved through the transformation of existing technology; overall diversification emphasizes the change of the scope of operation, requiring enterprises to expand their operation scope by connecting with factors related to their products, such as raw materials, technology, and market [5].
3. Impact of Diversification Strategy on the Performance of Game Companies
In the operational process of all game companies, the impact of diversification strategy on game companies' performance is generally divided into two parts: the change of operation mode and the shift of strategic planning. The gradual effect of these two parts of the transformation drives the performance improvement of the company. The impact of diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on the performance of game companies, taking Sanqi Mutual Entertainment Game Company as an example [6].
(1) Change of Operation Mode
Currently, Sanqi Mutual Entertainment Game Company has a very broad scope of operation, which is also the advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also covers the development and distribution of mobile games and web games, which are handled entirely by Sanqi Mutual Entertainment Game Company. In recent years, the company has continuously innovated with the times and expanded the market to the layout of film and television and anime secondary dimensions, and also shapes 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 early development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and at the beginning, the industry chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment industries, facing the risk of being merged by the market at any time. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, accompanying poor operation in the later stages and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Despite the acquisition in name, this was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed the asset restructuring of various industries under multi-party cooperation. It is worth mentioning that the strategy that Sanqi Mutual Entertainment had always operated is now beginning to show signs of success. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-main business listed company with advanced production manufacturing and modern cultural creative in parallel. Correspondingly, Sanqi Mutual Entertainment's company operation strategy is also changing, and the business scope originally covered by the cultural creative industry changes.
