This Lord is Very Scientific-Chapter 694 - 626
,
(To prevent theft, this will be sent later.) Abstract: With the advancement of technology and the coverage model of smart networks, the recent rise of the gaming industry is evident to the populace. The dissemination methods of games are no longer limited to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate and update, and enhance performance to keep up with the rapid development of the times. The diversification strategy precisely meets the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred model for corporate development, is equally applicable to game companies. This article takes Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of game companies.
Keywords: Diversification strategy; Game companies; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic approach taken by enterprises in the operational process to capture more new markets and explore new markets. It is also a strategic plan for entering new business fields with targeted preparation to avoid risks encountered during the operation of a single business. The practical application of diversification strategy in game companies can effectively improve company performance, bringing a transformation from quantitative change to qualitative change for the development of game companies.
1. Macroeconomic Background of Diversification Strategy
Entering 2021, under the effective control of the pandemic by the state, people's lives returned to normal, and the economy and culture showed a prosperous recovery. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry basically recovered to the pre-pandemic level [1]. This is very favorable news for the gaming industry, which holds a significant share of the cultural industry. Although the pandemic did not greatly affect the gaming industry, the inability to conduct offline events consistently impacted the performance of game companies. Through the recovery of the cultural industry, for most game companies, it means that the great development and prosperity of the cultural industry can stimulate and drive more game companies toward sustained development [2].
From the outbreak of the pandemic last year to today's stabilization, the state has issued relevant policies from various aspects such as finance, system, and financial support to promote the development of the cultural industry. The pandemic may have halted people's travel, but it cannot control the spread speed of online networks. More and more new media emerged, driving the development of the cultural industry during the pandemic prevention period. However, since all enterprises wanted to enter the online market, the competitive environment within the cultural industry became very intense. Many traditional offline enterprises at this time could not withstand the impact of the pandemic and were eliminated by society, but in this short two-year period, many successful transformational cultural industries also emerged. These enterprises mostly relied on the diversification strategy model to accelerate transformation and upgrading, and during the pandemic prevention period with significantly increased resident consumption levels, they also gained significantly, obtaining more diversified development models and sources of income. For example, the transformation made by Sanqi Mutual Entertainment Company during the pandemic control period is worth emulating by most game companies [3].
2. Brief Analysis and Classification of Diversification Strategy
(1) Brief Analysis of Diversification Strategy
The diversification strategy was proposed by the progenitor of strategic management, Igor Ansoff. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategy. This strategic model, which influences the world, is involved in the management guidelines and policies of many countries, so much so that today every large and small enterprise follows the development model of diversification strategy to seek a place [4].
(2) Classification of Diversification Strategy and Their Meanings
Diversification strategy is divided into four types: Horizontal diversification, vertical integration, concentric diversification, and comprehensive diversification. The meanings of the four different models derived from diversification strategy also vary. Horizontal diversification refers to the company using the original conditions provided by the market to produce new products that can meet new user needs, thereby driving market consumption; vertical integration is when a company derives vertically according to its own development situation, using product industry chains to infiltrate other market fields to seek new consumer targets; concentric diversification focuses more on the innovation of existing technology, needing to produce new products within the original production range, and the entire process is realized through the transformation of existing technology; comprehensive diversification places more emphasis on expanding the scope of operations, and the company needs to connect factors related to its own products' raw materials and technology as well as the market to expand the scope of operations [5].
3. Impact of Diversification Strategy on Game Companies' Performance
It can be said that in the operational process of all game companies, the impact of diversification strategy on game companies' performance is uniformly divided into two parts: changes in the operational model and shifts in strategic planning. From the changes in these two parts, effects gradually arise to drive 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 game companies' performance [6].
(1) Changes in Operational Model
Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is also reliant on the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company also thoroughly handles the development and distribution of mobile games and web games. Moreover, in recent years, it has continuously innovated by keeping pace with cutting-edge technology, expanding the market to include film and anime dimensions, and also shaping its market cultural industry chain in music, VR technology, and various streaming entertainment businesses belonging to Sanqi Mutual Entertainment Game Company.
Established in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth path in its early development. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, initially not involving the operation of gaming or entertainment industries in its industry chain, always facing the risk of being absorbed 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 and market contraction in later stages, Sanqi Mutual Entertainment eventually could not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with sixty percent equity. Although nominally acquired, this was a development opportunity worthy of grasping for Sanqi Mutual Entertainment. The two companies completed asset reorganization of various industries through multi-party collaboration. It is worth noting that the strategy Sanqi Mutual Entertainment has been running started to shine at this point. Sanqi Mutual Entertainment Company transformed from being a single modern cultural creative company before the acquisition to today's dual-major listed company with advanced production manufacturing and modern cultural creativity running in parallel. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment also underwent changes, covering business areas of the original cultural creative industries.
