This Lord is Very Scientific-Chapter 680 - 612
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(Anti-theft, to be released later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years is evident to the public. Games are no longer spread through stereotypical promotional methods, and their influence has gradually expanded to all aspects of life. Correspondingly, gaming companies need to continually integrate resources, innovate, and iterate to improve performance along with the rapid development of the times. The diversification strategy precisely meets the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as the first choice for enterprise development, is also applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to illustrate the impact of the diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment
The diversification strategy is a market strategy adopted by enterprises during their operations to occupy more and explore new markets. It is also a strategic plan for companies to avoid the risks encountered during the operation of a single business and to enter new business fields with focus and preparation. Applying the diversification strategy to gaming companies can effectively improve company performance, bringing a transformation from quantitative to qualitative in the company's development.
1. The Macroeconomic Background of the Diversification Strategy
Entering 2021, under the effective control of the epidemic by the state, people's lives have returned to normal, and the economic culture presents a great trend of recovery. 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 returned to the pre-epidemic level [1]. This is very favorable news for the gaming industry, which accounts for a large proportion of the cultural industry. Although the arrival of the epidemic did not cause too much impact on the gaming industry, the inability to hold offline activities has always affected the performance of gaming companies. The warming up of the cultural industry signifies that the great development and prosperity of the cultural industry can promote more gaming companies to embark on the path of sustainable development [2].
From the outbreak of last year's epidemic to the current stabilization of the epidemic, the state has issued relevant policies to support the development of the cultural industry from multiple aspects, such as finance, system, and finance. Although the epidemic hindered people's travel, it could not control the speed of online network dissemination. More and more new media appeared, driving the development of the cultural industry during the epidemic prevention and control period. However, because various enterprises all want to squeeze into the online market, the competitive environment among the cultural industries is very fierce. Many traditional offline enterprises could not withstand the impact of the epidemic and were eliminated by society at this time. But in these short two years, many successful transformations in the cultural industry have emerged, and most of these companies rely on the diversification strategy model to accelerate transformation and upgrading. During the epidemic prevention and control period, when the level of residents' consumption increased significantly, they also gained a lot and obtained more diversified development models and channels of financial income. For example, the transformation made by Sanqi Mutual Entertainment during the epidemic prevention and control period is worth most gaming companies' reference [3].
2. A Brief Analysis and Classification of the Diversification Strategy
(1) A Brief Analysis of the Diversification Strategy
The diversification strategy was proposed by Igor Ansoff, the founder of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This strategic model, which influences the world, is involved in the management policy guidelines of many countries, so much so that today every large and small enterprise seeks a place according to the development model of the diversification strategy [4].
(2) Classification and Meaning of Diversification Strategy
The diversification strategy is categorized into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different models derived from the diversification strategy have different meanings. Horizontal diversification refers to enterprises utilizing the original market conditions to produce new products that can meet new user needs, thereby driving market consumption; vertical integration refers to enterprises vertically deriving based on their development situation, using the product industry chain to penetrate other market fields to seek new consumption targets; concentric diversification emphasizes innovation in existing technologies, requiring the production of new products within the existing production range, and the entire process is realized through the transformation of existing technologies; conglomerate diversification pays more attention to the expansion of operational scope changes, enterprises need to connect raw materials and technology related to their products and market and other factors to expand the scope of operations [5].
3. The Impact of Diversification Strategy on the Performance of Gaming Companies
It can be said that in the operation process of all gaming companies, the impact of the diversification strategy on the performance of gaming companies is uniformly divided into two parts: changes in operational models and the shift of strategic planning. From these two parts of change, effects gradually arise, driving the performance improvement of the company. The impact of the diversification strategy is multi-faceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze the impact of the diversification strategy on the performance of gaming companies [6].
(1) Changes in Operational Models 𝒻𝑟𝘦𝘦𝘸ℯ𝒷𝑛𝘰𝓋ℯ𝘭.𝘤𝘰𝘮
Currently, it seems that the main operational scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also the advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but it also exclusively oversees the research and development and distribution of mobile games and web games and has constantly innovated in recent years by keeping up with the times and technology, expanding the market to layout films and animations in the anime subculture. It is also shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live broadcasts and other pan-entertainment businesses.
Founded in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth development path initially. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment industries, always facing the risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. But accompanied by poor subsequent operations and market tightening, 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, this was a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed asset restructuring in various industries under multi-faceted cooperation. It is worth mentioning that the strategy always operated by Sanqi Mutual Entertainment began to show its brilliance at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural and creative company before being acquired to a dual-core listed company of advanced manufacturing and modern cultural creativity running in parallel. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment is also undergoing changes, and the scope of business covered by the original cultural and creative industry
