This Lord is Very Scientific-Chapter 678 - 610
(Anti-theft, will be sent later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years is evident to the public. The traditional promotion model of games is no longer rigid, and the influence of games has gradually expanded to various aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate, and iterate to improve performance in sync with the rapid development of the times. A diversification strategy perfectly caters to the planning needs and development goals within the game industry. In the context of economic globalization, the diversification strategy is also applicable to game companies as the preferred model for enterprise development. This article 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 strategy means adopted by companies during operation to occupy and develop new markets and is also a strategic plan for companies to avoid risks encountered by operating a single business by specifically and proactively entering new business fields. Applying a diversification strategy in gaming companies can effectively improve company performance, bringing about a transition from quantitative to qualitative change in the development of the company.
1. The macro background of the diversification strategy
Entering 2021, under the effective control of the epidemic by the state, people's lives are getting back on track, and the economy and culture are showing a great recovery trend. On April 30, 2021, according to data released by the National Bureau of Statistics, the development of the national cultural industry has basically recovered to pre-epidemic levels[1]. This is very favorable news for the game industry, which constitutes a significant portion of the cultural sector. Although the arrival of the epidemic did not greatly affect the game industry, the inability to conduct offline activities has always impacted game companies' performance. With the cultural industry's recovery, for most game companies, this means the substantial development and prosperity of the cultural industry can promote more game companies to embark on a path of sustainable development[2].
From last year's outbreak of the epidemic to the current stabilization, the country has promulgated relevant policies from various aspects like finance, systems, and finance to support the development of the cultural industry. Although the epidemic 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 epidemic prevention period; however, since enterprises are all trying to squeeze into the online market, competition within the cultural industry is extremely fierce. Many traditional offline enterprises could not withstand the impact of the epidemic and were eliminated by society, but many successful transformations in the cultural industry have emerged in these short two years. These enterprises mostly rely on a diversified strategic model to accelerate transformation and upgrade, achieving substantial results during the epidemic prevention period of significantly increasing consumer levels and acquiring more diversified development models and income channels. For instance, the transformation made by Sanqi Mutual Entertainment during the epidemic prevention period is worth learning from by most game companies[3].
2. Brief analysis and classification of the diversification strategy
(a) Brief analysis of the diversification strategy
Diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff, in his book "Corporate Strategy" where he mentioned the classification of diversification strategy. This globally influential strategic model is involved in management policy guidelines in multiple countries, so much so that today every large and small enterprise is seeking a place according to the development model of diversification strategy[4].
(b) Classification and meaning of the diversification strategy
There are four types of diversification strategies: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The different strategic models derived from the diversification strategy have distinct meanings. Horizontal diversification refers to enterprises using the raw conditions provided by the market to produce new products that meet new user demands, thereby driving market consumption. Vertical integration is the vertical derivation by enterprises based on their development status, utilizing the product industry's value chain to penetrate other market areas seeking new consumers. Concentric diversification focuses more on the innovation of existing technology and requires the production of new products within the existing production scope, achieving the whole process through the transformation of existing technology. In contrast, conglomerate diversification emphasizes the expansion and change of the business scope more, requiring enterprises to expand their business scope by connecting factors like raw materials, technology, and markets related to their products[5].
3. The impact of diversification strategy on the performance of game companies
It can be said that in the operation of all game companies, the impact of diversification strategy on the performance of game companies is uniformly divided into two parts: the change in operation mode and the transfer of strategic planning. From these two parts, the effects gradually emerge, driving the performance improvement of the company. The impact brought by diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on the performance of game companies using Sanqi Mutual Entertainment Game Company as an example[6].
(1) Change in the mode of operation
At present, the main operation scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also due to the advantages brought by the diversification strategy. The company's business not only involves interactive entertainment operations but also encompasses the research, development, and distribution of mobile and web games under the Sanqi Mutual Entertainment Game Company. Moreover, in recent developments, following the technological advancements of the times, the market has been expanded to the layout of film and television as well as anime subculture. It is also shaping its cultural industry chain in music, VR technology, and various types of live entertainment, forming a market culture industry chain belonging to the Sanqi Mutual Entertainment Game Company.
Established in 1995, Sanqi Mutual Entertainment Game Company didn't have a smooth path in the early stages of development. Its predecessor was a small enterprise, initially not including the operation of game and entertainment industries in its industry chain, always at risk of being annexed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company listed in 2011. But with poor management and market contraction in later operations, Sanqi Mutual Entertainment ultimately did not escape 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 grasping. The two companies completed the asset reorganization of various industries through multi-party cooperation. It is worth mentioning that the strategic deployment operated by Sanqi Mutual Entertainment has already begun to shine at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before acquisition into a dual-main business listed company with advanced production manufacturing and modern cultural creativity running parallel in its current state, with corresponding changes occurring in the company's operational strategy, alongside the business scope covered by the original cultural creative industry.
