This Lord is Very Scientific-Chapter 684 - 616
(Anti-theft, will be released later.) Abstract: With the advancement of technology and the spread mode of intelligent networks, the rise of the gaming industry in recent years has been apparent to the nation. The dissemination method of games is no longer confined to stereotypical promotional modes, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, renew, and improve performance in this era of rapid development. Diversification strategies precisely cater to the planning needs and development goals within the gaming industry. In the context of economic globalization, diversification strategy, as the preferred model for enterprise development, is also applicable to gaming companies. This article explains the impact of diversification strategy on the performance of gaming companies using Sanqi Mutual Entertainment Company as an example.
Keywords: diversification strategy; gaming company; performance; impact; Sanqi Mutual Entertainment Company
Diversification strategy is the market strategic method employed by enterprises to occupy new markets and explore new markets during their operations. It is also the strategic planning adopted by enterprises to avoid risks encountered during the operation of a single business and to enter new business fields with targeted preparation. Applying diversification strategy practically to gaming companies can effectively improve company performance, bringing about a transformation from quantitative change to qualitative change in the development of gaming companies.
1. Macroscopic Background of Diversification Strategy
Entering 2021, with the effective control of the pandemic by the state, people's lives have returned to normal, and the economy and culture have shown a great recovery trend. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically recovered to pre-pandemic levels [1]. This is very favorable news for the gaming industry, which occupies a significant proportion of the cultural industry. Although the arrival of the pandemic did not cause too much impact on the gaming industry, the inability to conduct offline activities always affected the performance of game companies. The warming of the cultural industry implies a great development and prosperity, which can promote and drive more gaming companies onto the path of sustainable development [2].
From the outbreak of the pandemic last year to the current stabilization, the country has issued relevant policies from finance, system, and financial aspects 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. More and more new media are emerging, driving the development of the cultural industry during the pandemic prevention and control period. Due to the desire of various enterprises to squeeze into the online market, the competitive environment within the cultural industry is extremely intense. Many traditional offline enterprises have been eliminated by society, unable to withstand the impact of the pandemic, but in just these two years, numerous successfully transformed cultural industries have emerged, largely relying on the diversification strategy model to accelerate transformation and upgrading. During the pandemic prevention and control period, when residents' consumption levels have significantly increased, these enterprises have also yielded substantial gains, obtaining more diversified development models and funding income channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention and control period is worth emulating by most gaming companies [3].
2. Overview and Classification of Diversification Strategy
(a) Overview of Diversification Strategy
Diversification strategy was proposed by Igor Ansoff, the progenitor of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategic model is involved in management policies in multiple countries, leading every enterprise, large or small, to seek a place according to 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 overall diversification. The meanings derived from these four different modes of diversification strategy also vary. Horizontal diversification refers to enterprises 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 enterprises derive vertically 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 existing technology, requiring the production of new products within the scope of existing production, with the entire process realized through the transformation of existing technology. Overall diversification emphasizes the expansion and change of the business scope, requiring enterprises to connect raw materials, technology, market, and other factors related to their products to expand the business scope [5].
3. Impact of Diversification Strategy on Game Company Performance
It can be said that in the operation process of all gaming companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: the change in operation mode and the shift in strategic planning. From the effects gradually produced by these two parts of change, company performance is driven to improve. The impact brought by 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) Change in Operation Mode
Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is also due to the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also encompasses the development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. Furthermore, in recent developments, it has continuously innovated along with the times and technology, expanding the market to include layout in film and animation, and creating a market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in broader entertainment businesses such as music, VR technology, and various live broadcasts.
Sanqi Mutual Entertainment Game Company was established in 1995, but the path was not smooth in its early development. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, which initially did not involve game and other entertainment industry operations in its industrial chain, always facing the risk of market consolidation. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company was listed in 2011. Yet, with poor subsequent operations and market contraction, Sanqi Mutual Entertainment still did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired sixty percent of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd.'s shares. Although nominally acquired, this was a development opportunity worth grasping for Sanqi Mutual Entertainment. Through multiple collaborations, the two companies completed asset restructuring of various industries. It is worth mentioning that the development strategy that Sanqi Mutual Entertainment has been operating began showing its potential at this time. The company transformed from a single modern cultural creative company prior to the acquisition to a dual-main business listed company concurrently engaged in advanced production manufacturing and modern cultural creativity, correspondingly undergoing changes in corporate operational strategy, and the range of businesses covered by the former cultural creative industry
