This Lord is Very Scientific-Chapter 679 - 611
(Anti-theft, send it in time.) Abstract: With technological progress and the coverage model of intelligent networks, the rise of the game industry in recent years is evident to everyone. The dissemination of games is no longer confined to rigid promotional modes, and the influence of games has gradually expanded to various aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, update, and improve performance in line with the rapid development of the era. A diversification strategy fits well with the planning needs and development goals within the game industry. Against the background of economic globalization, the diversification strategy, as the preferred development mode for enterprises, is also applicable to game companies. This article explains the impact of the diversification strategy on the performance of game companies by taking Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification Strategy; Game Company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic approach adopted by enterprises during operations to occupy new markets and explore new markets more effectively. It is also a strategic plan for enterprises to enter new business areas with targeted preparation to avoid the risks encountered in operating a single business. Applying a diversification strategy to game companies can effectively improve company performance and bring about a process of transformation from quantitative to qualitative change for the development of game companies.
1. Macro Background of Diversification Strategy
Stepping into 2021, under the strong control of the pandemic by the country, people's lives have returned to normalcy, and the economy and culture have shown a prosperous recovery trend. On April 30, 2021, according to data released by the National Bureau of Statistics, the development of the cultural industry nationwide has basically returned to the level before the pandemic [1]. This is very favorable news for the game industry, which occupies a large proportion of the cultural industry. Although the pandemic has not greatly impacted the game industry, the inability to conduct offline activities has always affected the performance of game companies. The warming of the cultural industry 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].
From the outbreak of the pandemic last year to the current stability, the country has issued relevant policies to support the development of the cultural industry from multiple aspects such as finance, systems, and finance. Although the pandemic has blocked people's travel paths, it cannot control the speed of online network dissemination. More and more new media have emerged, promoting the cultural industry development during the pandemic prevention period. However, due to the desire of enterprises to enter the online market, the competitive environment among the cultural industries has become very fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. Yet, in these short two years, many successful transformations in the cultural industry have emerged. These enterprises have mostly relied on the diversification strategy model to accelerate transformation and upgrading and have also gained significantly in residents' consumption levels, attracting more diverse development models and sources of income, such as the transformation of Sanqi Mutual Entertainment Company during the pandemic prevention period, which is worth emulating 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 "What Is Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategy model is involved in management policies in multiple countries, so today all enterprises, large and small, seek a place according to the development model of diversification strategy [4].
(2) Classification and Meaning of Diversification Strategy
There are four types of diversification strategy: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings of the four different models derived from the diversification strategy also vary. Horizontal diversification refers to the enterprise using the original conditions provided by the market to produce new products that can meet the new needs of users, thereby driving market consumption. Vertical integration is when the enterprise develops vertically based on its development situation, using the product industry chain to penetrate other market fields seeking new consumer objects. Concentric diversification focuses more on original technology innovation, requiring new product production within the original production range, achieving the whole process through the transformation of original technology. Conglomerate diversification pays more attention to expanding operational range changes, requiring enterprises to relate raw materials and technologies associated with their own products and market factors to expand the operational 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 diversification strategy on game company performance is unified into two parts: changes in operational mode and shifts in strategic planning. The effects gradually produced from these two parts promote enhanced performance for the company. The impact brought by the diversification strategy is manifold. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on game company performance [6].
(1) Changes in Operational Mode
Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is quite extensive, which also relies on the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but also Sanqi Mutual Entertainment Game Company independently handles the research and development and distribution of mobile games and web games. In recent years, keeping pace with technological advancements, the company continuously innovates and expands its market layout to include film and television, and ACG (Anime, Comic, and Games) culture. It is also establishing its market cultural industry chain in various entertainment businesses such as music, VR technology, and various live broadcasts.
Sanqi Mutual Entertainment Game Company was established in 1995. However, the initial development path was not smooth. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise. At first, its industrial chain did not involve the operation of game and other entertainment industries, with the risk of being swallowed by the market at any time. Yet, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. However, with poor operations and market contraction in later stages, Sanqi Mutual Entertainment could not escape the fate of acquisition.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with 60% equity. Although it was acquired nominally, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. Through multi-party cooperation, the two companies completed the asset restructuring of various industries. It is worth mentioning that the diversified strategy that Sanqi Mutual Entertainment always operated began to show its promise at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-main business listed company in advanced manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy in Sanqi Mutual Entertainment also underwent changes, and the business scope covered by the previous cultural creative industry...
