This Lord is Very Scientific-Chapter 682 - 614
(Anti-theft notice: will be posted later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years has been evident to the populace. The dissemination method of games is no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, and update to improve performance in line with the rapid development of the times. Diversification strategy aptly meets the planning requirements and development goals within the game industry. In the context of economic globalization, diversification strategy, as a preferred mode of enterprise development, is also applicable to game companies. This paper elaborates on the impact of diversification strategy on the performance of game companies, taking Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy means adopted by enterprises during operations to occupy more new markets and explore new markets. It is also a strategic planning adopted to avoid risks encountered in the operation of a single business by entering a new field of business with targets and preparation. Applying diversification strategy to game companies can effectively enhance company performance, bringing about a process of quantitative to qualitative change in the development of game companies.
1. Macroscopic Background of Diversification Strategy
Entering 2021, with the country's effective control over the pandemic, people's lives have resumed normalcy, and the economy and culture are showing signs of recovery. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to pre-pandemic levels[1]. This is very favorable news for the game industry, which occupies a large proportion of the cultural industry. Although the arrival of the pandemic did not greatly affect the game industry, the inability to conduct offline activities always impacted the performance of game companies. With the recovery of the cultural industry, for most game companies, this signifies that the great development and prosperity of the cultural industry can promote and lead more game companies onto the path of sustainable development [2].
From last year's outbreak of the pandemic to the current stabilization, the country has issued relevant policies from various aspects, such as finance, systems, and finance, to support the development of the cultural industry. Although the pandemic has hindered people's travel, it cannot control the spread speed of online networks. The emergence of increasingly more new media has driven the development of the cultural industry during the pandemic prevention period. However, as companies compete to enter the online market, the competitive environment within the cultural industry is very fierce, and many traditional offline enterprises are unable to withstand the impact of the pandemic and are eliminated by society. In contrast, in just two years, many cultural industries have successfully transformed. These companies mostly rely on the diversification strategy mode to accelerate transformation and upgrade, and during the pandemic prevention period with significantly improved consumer consumption levels, they have also reaped considerable rewards, acquiring diversified development models and channels of financial income. For example, the transformation carried out by Sanqi Mutual Entertainment during the pandemic prevention period is worth emulating by most game companies [3].
2. Brief Analysis and Classification of Diversification Strategy
(a) Brief Analysis of Diversification Strategy 𝐟𝕣𝗲𝕖𝕨𝗲𝐛𝗻𝗼𝐯𝗲𝚕.𝗰𝚘𝐦
Diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategy. This strategic model, which has influenced the world, is included in the management policy of many countries, to the extent that today every enterprise, large or small, seeks a place following the development model of diversification strategy [4].
(b) Classification and Meaning of Diversification Strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different modes derived from diversification strategy have varied meanings. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that meet new user demands, thereby driving market consumption; Vertical integration is the vertical derivation of enterprises based on their development situation, using the product industry chain to penetrate other market fields to seek new consumer targets; Concentric diversification focuses more on the innovation of the original technology, requiring the production of new products within the original production range, achieving transformation through the metamorphosis of original technology throughout the process; Conglomerate diversification pays more attention to changes in the expansion of business scope. Enterprises need to expand their business scope by connecting the factors related to their products, raw materials, technologies, and markets [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 the operational model and the shift in strategic planning. The effects gradually generated from these two parts drive the enhancement of company performance. The impact brought by the diversification strategy is multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on game company performance [6].
(1) Change in Operational Model
Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is very extensive, which is an advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also singularly manages the development and distribution of mobile games and web games. Moreover, in recent years, it continues to innovate, keeping up with the technology of the times, expanding the market to include the layout of film and animation ACG (Anime, Comics, and Games), as well as shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in fields like music, VR technology, and various live streaming pan-entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but its initial development journey was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, the industry chain of Sanqi Mutual Entertainment did not involve the operation of games and other entertainment industries, facing the risk of being engulfed by the market at any time. However, independently relying on the steady development of a single industry, Sanqi Mutual Entertainment company went public in 2011. But with subsequent poor operations and market contraction, Sanqi Mutual Entertainment eventually 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 it was an acquisition, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. Through multi-faceted collaboration between the two companies, they completed asset restructuring of various industries. It is worth mentioning that the operational strategy that Sanqi Mutual Entertainment has consistently operated with was beginning to show its edge at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before being acquired to a dual main-listed company that operates advanced production manufacturing alongside modern cultural creativity. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment also underwent changes, with the scope of business covered by the original cultural creative industry.
