This Lord is Very Scientific-Chapter 686 - 618
(Anti-theft, will be published in due time.) Abstract: With technological progress and the coverage model of intelligent networks, the rise of the gaming industry in recent years has been evident to the public. The ways games are propagated are no longer confined to rigid promotion models, and the influence of games is gradually expanding to all aspects of life. Correspondingly, game companies also need to continually integrate resources, innovate, and update with the rapid development of the times to improve performance. Diversification strategy precisely meets the planning needs and development goals within the gaming industry. Under the backdrop of economic globalization, diversification strategy, as the preferred development model for enterprises, is also applicable to game companies. This article expounds on the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy tool employed by enterprises during their operations to capture new markets and explore new ones. It is also a strategic planning adopted to mitigate risks encountered in operating a single business and to make targeted and prepared entries into new business fields. Applying diversification strategy to game companies can effectively improve company performance, bringing about a process from quantitative to qualitative changes for the development of game companies.
1. Macro Background of Diversification Strategy
Entering 2021, under the effective control of the pandemic by the state, people's lives have resumed normalcy, and the economic culture is also showing a promising recovery trend. On April 30, 2021, according to data published by the National Bureau of Statistics, the national cultural industry development has basically returned to the pre-pandemic level [1]. For the gaming industry, which accounts for a significant proportion of the cultural industry, this is extremely favorable news. Although the outbreak of the pandemic did not cause much impact on the gaming industry, the inability to conduct offline activities has always affected the performance of game companies. With the warming up of the cultural industry, for most game companies, this means the great development and prosperity of the cultural industry can promote and drive more game companies to embark on a path of sustainable development [2].
From the outbreak of last year's pandemic to the stabilization of the pandemic now, the state 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 halted people's travels, it cannot control the speed of online network dissemination. An increasing number of new media have emerged, driving the development of the cultural industry during pandemic prevention and control. However, as various enterprises vie to enter the online market, the competition environment within the cultural industry is extremely fierce. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society, but in this short span of two years, many successful transformations in the cultural industry have emerged, most of which relied on the diversification strategy model to accelerate transformation and upgrading. During the pandemic prevention and control period, with the noticeable increase in residents' consumption levels, they also achieved substantial gains, obtaining more diverse development models and income channels. The transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention period is worth learning from for most game companies [3].
2. Brief Analysis and Classification of Diversification Strategy
(1) Brief Analysis of Diversification Strategy
Diversification strategy was proposed by Igor Ansoff, the pioneer of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategies. This world-influencing strategy model is included in the management policies of many countries, to the extent that every enterprise, large and small, today seeks a place according to the development model of diversification strategy [4].
(2) 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 different 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 based on the enterprise's own development situation and involves deriving vertically and penetrating the product industry chain into other market fields to seek new consumers. Concentric diversification focuses more on innovation of existing technology, requiring the production of new products within the existing production scope, achieving transformation through the metamorphosis of existing technology. Conglomerate diversification emphasizes expanding operational scope changes, requiring the enterprise to expand its operational scope by connecting factors related to its own products such as raw materials, technology, and markets [5].
3. Impact of Diversification Strategy on Game Company Performance
In the operation process of all game companies, the impact of diversification strategy on game company performance is divided into two parts: changes in operational mode and shifts in strategic planning. These two parts' changes gradually produce effects that drive the enhancement of the company's performance. The impact brought by diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of diversification strategy on game company performance [6].
(1) Changes in Operational Mode
Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is very extensive. This is also due to the advantages brought by diversification strategy. The company's business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company also oversees the development and distribution of mobile games and web games in one go. In recent developments, it has constantly innovated by keeping up with contemporary technology, expanding the market to lay out films and animation ACG (anime, comic, game) and also shaping Sanqi Mutual Entertainment Game Company's market cultural industry chain in various general entertainment businesses such as music, VR technology, and live streaming.
Sanqi Mutual Entertainment Game Company was founded in 1995, but its early development path was not smooth. 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 and was always at 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 with poor subsequent operations and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% equity of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was technically an acquisition, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed the asset restructuring of various industries through multi-faceted cooperation. It is worth mentioning that the strategic tactics consistently operated by Sanqi Mutual Entertainment had already begun to show promise. Sanqi Mutual Entertainment Company transformed from a single modern cultural creativity company before being acquired to a dual-main business listed company of advanced production manufacturing and modern cultural creativity that operate in parallel. Corresponding to this, the company operation strategy of Sanqi Mutual Entertainment has also been changing, with the business scope covered by the original cultural and creative industries being...
