This Lord is Very Scientific-Chapter 683 - 615
(Anti-theft, will send 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. The dissemination methods of games are no longer limited to traditional promotional modes, and the influence of games has gradually expanded into various aspects of life. Correspondingly, gaming companies need to continuously integrate resources, innovate, update, and improve performance with the rapid development of the times. The diversification strategy exactly meets the planning needs and development goals within the gaming industry. In the context of economic globalization, diversification strategy, as a preferred model for enterprise development, is equally applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on gaming company performance.
Keywords: diversification strategy; gaming company; performance; impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy adopted by enterprises in the course of operation to capture new markets and expand new markets, and it is a strategic plan used by enterprises to avoid the risks encountered in operating a single business by targeting and preparing to enter new business fields. Applying the diversification strategy to gaming companies can effectively improve company performance and bring about a transition from quantitative change to qualitative change in the development of gaming companies.
1. Macro Background of Diversification Strategy
Entering 2021, with the effective control of the epidemic by the state, people's lives have gotten 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 returned to pre-epidemic levels[1]. This is very favorable news for the gaming industry, which accounts for a large proportion of the cultural industry. Although the epidemic did not have a significant impact on the gaming industry, the inability to conduct offline activities has always affected the performance of gaming companies. The warming of the cultural industry means for most gaming companies that the great development and prosperity of the cultural industry can promote and drive more gaming companies onto a path of sustainable development[2].
From last year's outbreak of the pandemic to the current stability, the state has introduced relevant policies from fiscal, institutional, and financial aspects to support the development of the cultural industry. Although the epidemic has hindered people's travel, 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 and control period. However, due to the fierce competition environment in the cultural industry, many traditional offline enterprises were eliminated by society during this time due to the impact of the epidemic. However, in these short two years, many successful transformations in the cultural industry have emerged, and most of these enterprises accelerated transformation and upgrading by relying on the diversification strategy model, also gaining considerable rewards during the significant increase in resident consumption levels during the epidemic prevention and control period, obtaining more diversified development modes and funding income channels. For example, the transformation by Sanqi Mutual Entertainment Company during the epidemic prevention and control period is worth emulating for most gaming companies[3].
2. Brief Analysis and Classification of Diversification Strategy
(1) Brief Analysis of Diversification Strategy
The diversification strategy was proposed by Igor Ansoff, the pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This globally influential strategic model is involved in the management policies of multiple countries today, leading to every enterprise, big or small, seeking a place according to the diversification development model[4].
(2) Classification and Meaning of Diversification Strategy
The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different modes derived from the diversification strategy have different meanings. Horizontal diversification refers to a company using the original conditions provided by the market to produce new products that can meet users' new needs, thereby driving market consumption. Vertical integration is when a company develops vertically according to its own development situation, using its product chain to penetrate into other market fields to seek new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production range, achieving this through the transformation of existing technology. Conglomerate diversification focuses more on expanding the scope of operation changes, requiring the company to connect raw materials and technologies related to its products and market factors to expand its scope of operation[5].
3. Impact of Diversification Strategy on Gaming Company Performance
It can be said that in the operation of all gaming companies, the impact of diversification strategy on gaming company performance is uniformly divided into two parts: the change in operation mode and the transfer of strategic planning. The effect of these changes gradually promotes the improvement of company performance, with the impact of diversification strategy being multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on gaming company performance[6].
(1) Change in Operation Mode
Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is very extensive, which is an advantage brought about by the diversification strategy. The company not only involves interactive entertainment operations, but also handles the research and distribution of mobile games and web games under its umbrella. In recent years, the company has continuously innovated and expanded its market to include the layout of film, television, and anime 2D culture while also playing a part in music, VR technology, and various live entertainment businesses, shaping its market cultural industry chain.
Founded in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth sailing in its early developmental path. Initially, the predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and its industry chain did not involve the operation of gaming and other entertainment industries, always at risk of being swallowed by the market. However, due to the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011, but amid later operational inadequacies and market tightening, it did not escape the fate of acquisition.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the shares of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was an acquisition in name, it was a developmental opportunity worth seizing for Sanqi Mutual Entertainment. With multifaceted collaboration between the two companies, all industry assets were restructured. It is worth mentioning that Sanqi Mutual Entertainment's operating strategy, which had always been pursued, started to show its strength at this time. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creative company before the acquisition to a dual-main business listed company combining advanced production manufacturing and modern cultural creativity. Correspondingly, the company's operation strategy has also been changing, with the business scope of the original cultural creative industry being covered.
