This Lord is Very Scientific-Chapter 681 - 613
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(Anti-theft, will be sent later.) Summary: 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. The dissemination methods of games are 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 consistently integrate resources, innovate, renew, and improve performance with the rapid development of the times. Diversification strategy aptly meets the planning requirements and development goals within the gaming industry. In the context of economic globalization, diversification strategy, as the preferred development model for enterprises, is also applicable to game companies. This article illustrates the impact of 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
Diversification strategy is a market strategic means used by enterprises during operations to capture new markets and expand into new ones. It's also a strategic planning approach enterprises use to evade risks encountered in operating a single business, targeting and preparing to enter new business domains. Applying diversification strategy in game companies can effectively enhance company performance, bringing about a process from quantitative to qualitative change in the development of game companies.
1. Macro Background of Diversification Strategy
Entering 2021, with the country's effective control of the pandemic, people's lives are back on track, and there's an excellent recovery trend in economic culture. 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 pre-pandemic levels [1], which is very favorable news for the gaming industry, which holds a significant share in the cultural industry. Although the arrival of the pandemic did not severely impact the gaming industry, the inability to carry out offline activities still affected game companies' performance. The warming of the cultural industry means a great development and prosperity in the cultural industry, driving more game companies to embark on a path of sustainable development [2].
From last year's pandemic outbreak to the current stabilization, the country has introduced relevant policies from various aspects such as finance, system, and finance to support the development of the cultural industry. Although the pandemic has hindered people's outings, it cannot control the speed of online network dissemination. More and more new media have emerged, driving the development of the cultural industry during the epidemic prevention period. However, due to various enterprises wanting to enter the online market, the competition environment within the cultural industry is extremely fierce. Many traditional offline enterprises were eliminated by society during this period due to the impact of the pandemic. Yet, many successful transitions have emerged in the cultural industry in just these two years. Most of these enterprises relied on the diversification strategy model to accelerate transition and upgrade. During the epidemic prevention period, where residents' consumption levels have significantly increased, they have also reaped substantial benefits, gaining more diversified development models and revenue channels. For example, Sanqi Mutual Entertainment Company's transition during the epidemic prevention period is worth emulating for most game companies [3].
2. Brief Analysis and Classification of Diversification Strategy
(a) Brief Analysis of Diversification Strategy
Diversification strategy was proposed by the forefather of strategic management, Igor Ansoff, in his work "What is Corporate Strategy," where he mentioned the classification of diversification strategy. This world-impacting strategic model is involved in management principles and policies across multiple countries, causing every large and small enterprise today to seek a place according to the diversification strategy development model [4].
(b) Classification and Meaning of Diversification Strategy
Diversification strategy is divided into four types: Horizontal Diversification, Vertical Integration, Concentric Diversification, and Overall Diversification. The four modes derived from diversification strategy also differ in meaning: Horizontal Diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user demands, hence driving market consumption; Vertical Integration is enterprises deriving longitudinally according to their development situation, infiltrating into other market domains to seek new consumer targets; Concentric Diversification focuses more on innovation of existing technologies, requiring new product production within the scope of existing production, with the entire process realized through the transformation of existing technologies; Overall Diversification emphasizes expanding operating scope changes, enterprises need to link factors such as raw materials, technology, and market related to their products for operating scope expansion [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 uniformly divided into two parts: changes in operating modes and shifts in strategic planning. The effects gradually generated from these two parts drive the company's performance improvement. The impact of diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on game company 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, which is an advantage brought by the diversification strategy. The company's business not only involves interactive entertainment operations, but Sanqi Mutual Entertainment Game Company also undertakes the research and distribution of mobile games and web games. In recent developments, keeping pace with technological advancements, it continually innovates by widening the market to encompass film and second-dimension anime layouts and shapes the market cultural industry chain of Sanqi Mutual Entertainment Game Company within music, VR technology, and various entertainment businesses such as live streaming.
Sanqi Mutual Entertainment Game Company was established in 1995. However, its early development was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, the industrial chain of Sanqi Mutual Entertainment did not involve the operation of gaming and other entertainment industries, constantly facing the risk of being absorbed by the market. But thanks to steady development in a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, with subsequent poor operations and market constriction, Sanqi Mutual Entertainment ultimately did not escape the fate of acquisition. 𝓯𝓻𝓮𝙚𝙬𝓮𝙗𝒏𝙤𝒗𝙚𝙡.𝒄𝒐𝓶
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired sixty percent of the equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, it represented a development opportunity worth seizing for Sanqi Mutual Entertainment. The two companies completed the asset restructuring of various industries through multi-party collaboration. It's worth mentioning that Sanqi Mutual Entertainment had begun to show its strategy at this time. Sanqi Mutual Entertainment Company transformed from being a singular modern cultural creativity company before acquisition to a dual-core listed company that operates both advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operational strategy also underwent changes, with the business scope covered by the original cultural creativity industry
