This Lord is Very Scientific-Chapter 687 - 619
(Anti-theft, to be released later.) Abstract: With the advancement of technology and the coverage model of intelligent networks, the rise of the game industry in recent years is evident to the nation. The dissemination of games is no longer confined to rigid promotional methods; the influence of games has gradually expanded into all aspects of life. Game companies, in response, must continuously integrate resources, innovate and iterate, and enhance performance to keep pace with rapid development. Diversification strategy perfectly meets the planning needs and development goals within the game industry. Under the backdrop of economic globalization, diversification strategy, as the preferred mode for enterprise development, is equally applicable to game companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of game companies.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic means adopted by enterprises during their operation to seize new markets and expand new markets. It is also a strategic plan for enterprises to avoid risks encountered in operating a single business and to enter new business fields with targeted preparation. The practical application of diversification strategy in game companies can effectively improve company performance, bringing about a process of transformation from quantitative to qualitative changes in the development of game companies. 𝒻𝓇𝑒𝘦𝘸𝑒𝒷𝓃ℴ𝑣𝘦𝑙.𝒸ℴ𝘮
1. Macro background of diversification strategy
Entering 2021, under the effective control of the pandemic by the country, people's lives have returned to normal, and the economic culture presents a promising 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 game industry, which holds a significant proportion of the cultural industry. Even though the arrival of the pandemic did not greatly impact the game industry, the inability to hold offline activities has always affected the performance of game companies. Through the warming of the cultural industry, for most game companies, this means that the great development and prosperity of the cultural industry can promote more game companies onto a sustainable development path[2].
From last year's outbreak of the pandemic to the current stabilization, the country has promulgated relevant policies from multiple 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 speed of online dissemination. The emergence of more and more new media has driven the development of the cultural industry during pandemic prevention and control periods. However, as each enterprise competes to enter the online market, the competitive environment within the cultural industry has become very intense. Many traditional offline enterprises have been eliminated by society due to the pandemic's impact in this short two-year period. However, many successfully transformed cultural industries have emerged, relying largely on the diversification strategy model to accelerate transformation and upgrading. During the pandemic prevention and control period, with the significantly improved level of resident consumption, these enterprises have also gained richly, acquiring more diverse development models and funding income channels. For instance, the transformation made by Sanqi Mutual Entertainment Company during the pandemic prevention period is worthy of emulation by most game companies[3].
2. Simplified analysis and classification of diversification strategy
(A) Simplified analysis of diversification strategy
Diversification strategy was proposed by the father of strategic management, Igor Ansoff. In his written work, "What is Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategic model is involved in the management guidelines and policies of many countries, leading to every enterprise, large or small, seeking 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 four different modes derived from the diversification strategy have varying meanings. Horizontal diversification refers to the production of new products that meet new user demands using the original conditions provided by the market to drive market consumption; vertical integration derives vertically according to the company's development situation, penetrating other market fields with the industry chain of products to seek new consumer targets; concentric diversification focuses more on innovations of existing technology, requiring the production of new products within the existing production range, achieving the transformation through the metamorphosis of existing technology; overall diversification emphasizes expanding the scope of operations, requiring enterprises to expand the scope of operations by connecting factors such as raw materials, technology, and market associated with their products[5].
3. Impact of diversification strategy on the performance of game companies
It can be said that during the operation process of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: changes in operation modes and the transfer of strategic planning. From the transformation of these two parts, effects gradually arise, driving the enhancement of company 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 the performance of game companies[6].
(1) Changes in operation modes
Currently, the main operation scope of Sanqi Mutual Entertainment Game Company is very broad, which is also an advantage brought by diversification strategy. The company's business involves not only the operation of interactive entertainment but also the research and development, distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company are handled by the company. In recent development, keeping up with technological advancements, it continues to innovate, expanding markets to layout film and animation secondary dimensions, and also shaping its market cultural industry chain for Sanqi Mutual Entertainment Game Company in music, VR technology, and various live streaming entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but the initial development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, at first, the industry chain of Sanqi Mutual Entertainment did not involve the operation of game and entertainment industries, always at risk of being merged by the market. But relying on stable development in a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, due to poor management in later stages and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of acquisition.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with sixty percent equity. Although nominally acquired, for Sanqi Mutual Entertainment, this is a development opportunity worth grasping. The two companies completed asset restructuring of various industries under multilateral cooperation. It is worth mentioning that the strategic operation that Sanqi Mutual Entertainment has always been implementing had already begun to show promise. Sanqi Mutual Entertainment Company transitioned from a single modern cultural and creative company before acquisition to now a dual-mainline listed company integrating advanced production manufacturing and modern cultural creativity. Correspondingly, Sanqi Mutual Entertainment's company operation strategy also changed, with the prior cultural and creative industry's business scope encompassed.
