This Lord is Very Scientific-Chapter 693 - 625
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(Protection against theft, will be sent later.) Abstract: With the advancement of technology and the coverage model of smart networks, the rise of the game industry in recent years is evident to the public. The method of spreading games is no longer limited to stereotyped promotional models, and the influence of games has gradually expanded to every aspect of life. Correspondingly, game companies need to continuously integrate resources, innovate updates, and improve performance along with the rapid development of the era. The diversification strategy perfectly aligns with the planning needs and development goals within the game industry. In the context of economic globalization, diversification strategy, as the preferred model for enterprise development, is also applicable to game companies. This paper, using Sanqi Mutual Entertainment Company as an example, explains the impact of diversification strategies on the performance of game companies.
Keywords: Diversification Strategy; Game Company; Performance; Impact; Sanqi Mutual Entertainment
Diversification strategy is a market strategic approach that enterprises adopt in the course of operation to occupy more new markets and explore new markets. It is also a strategic plan that enterprises use to avoid risks encountered in operating a single business, and to enter new business fields with targeting and preparation. Applying diversification strategy to game companies can effectively improve company performance, bringing a process from quantitative change to qualitative change for the development of game companies.
1. Macro-background of Diversification Strategy
Entering 2021, under the strong control of the epidemic by the state, people's lives have returned to normal, and economic culture also shows a great trend 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-epidemic levels [1]. This is very favorable news for the game industry, which accounts for a large proportion of the cultural industry. Although the arrival of the epidemic did not greatly affect the game industry, the inability to conduct offline activities always affects the performance of game companies. The warming of the cultural industry means for most game companies that the grand development and prosperity of the cultural industry can promote and drive more game companies to embark on the path of sustainable development [2].
From last year's outbreak to the current stabilization of the pandemic, the state has issued policies from various aspects such as finance, system, and finance to support the development of the cultural industry. Although the epidemic has blocked people's travel, it cannot control the spreading speed of online networks. More and more new media emerge, driving the development of the cultural industry during the epidemic prevention and control period. But given that each enterprise wants to squeeze into the online market, the competitive environment among cultural industries is extremely fierce. Many traditional offline enterprises were eliminated by society under the influence of the epidemic, but in this short two-year period, many successfully transitioned cultural industries emerged, mostly relying on diversification strategy models to accelerate transformation and upgrade. During the epidemic prevention and control period when residents' consumption levels significantly increased, they also gained a lot, acquiring more diversified development models and financial income channels, such as the transition made by Sanqi Mutual Entertainment during the epidemic prevention and control period, which is worth learning from by most game companies [3].
2. Simple Analysis and Classification of Diversification Strategy
(a) Simple Analysis of Diversification Strategy
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 strategies. This world-influencing strategic model is involved in the management policy guidelines of many countries, so much so that today every large and small enterprise is 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 diversification strategy also have different meanings. Horizontal diversification refers to the enterprise using the original conditions provided by the market to produce new products that can satisfy new user demands, thereby driving market consumption; Vertical integration is the enterprise deriving vertically according to its development situation, utilizing the product supply chain to infiltrate other market fields to seek new consumer targets; Concentric diversification focuses more on innovation of existing technology, needing to produce new products in the original production area, realizing through the transformation of existing technology; Overall diversification focuses more on changes in the expansion of the scope of operations. Enterprises need to connect with raw materials, technology, and market factors related to their products to expand their scope of operations [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: change in the operating model and shift in strategic planning. This effect gradually generates change from these two parts, driving the company's performance improvement. 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 the Operating Model
Currently, Sanqi Mutual Entertainment Game Company's main operating range is very extensive, which relies on the advantages brought by diversification strategy. The company's business not only involves interactive entertainment operations but also fully undertakes the research and development and distribution of mobile and web games under its banner. In recent years, keeping pace with the technology of the times, it continues to innovate, expanding the market to layout in film and animation secondary, and is also shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in music, VR technology, and various live entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but the development path in the early stage was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, the industrial chain of Sanqi Mutual Entertainment did not involve the operation of game and other entertainment industries, always with the 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 operation in the later stage and market shrinkage, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% ownership of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was acquired in name, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed asset restructuring of various industries through extensive collaboration. It is worth mentioning that the strategy Sanqi Mutual Entertainment has always operated began to show its prowess at this time. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creative company before the acquisition to today's advanced production manufacturing and modern cultural creativity coexisting dual main business listed company. Correspondingly, the company's operation strategy of Sanqi Mutual Entertainment also underwent changes, with the original range of business covered by the cultural creative industry.
