This Lord is Very Scientific-Chapter 695 - 627
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(Prevent unauthorized copying, to be sent later.) Abstract: With the progress of technology and the coverage pattern of intelligent networks, the rise of the gaming industry in recent years has been evident to the populace. The dissemination methods of games are no longer confined to stereotyped promotional models, and the influence of games has gradually expanded into various aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate, and update to improve performance in line with the rapid development of the times. The diversification strategy perfectly meets the planning needs and development goals within the gaming industry. In the context of economic globalization, the diversification strategy, as the preferred model for enterprise development, is also applicable to game companies. This article illustrates the impact of diversification strategy on game company performance, taking Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Game companies; Performance; Impact; Sanqi Mutual Entertainment Company
The diversification strategy is a market strategy adopted by enterprises in their operations to gain more and explore new markets. It is also a strategic plan adopted by companies to evade the risks encountered during the operation of a single business and to enter new business fields with focus and preparation. Applying the diversification strategy effectively to game companies can significantly enhance company performance, bringing a process of change from quantitative to qualitative for the development of game companies.
1. Macroscopic background of diversification strategy
Entering 2021, under the strong control of the pandemic by the state, people's lives have returned to normal, and the economic and cultural landscape shows signs of a significant recovery. On April 30, 2021, according to the relevant data published by the National Bureau of Statistics, the development of the national cultural industry has basically recovered to the pre-pandemic level [1], which is very favorable news for the gaming industry that holds a large proportion in the cultural industry. Although the arrival of the pandemic did not cause a major impact on the gaming industry, the inability to conduct offline activities always affected the performance of game companies. The warming of the cultural industry means, for most game companies, that the great development and prosperity of the cultural industry can promote more game companies to embark on the road of sustainable development [2].
From last year's outbreak of the pandemic to the current stabilization of the pandemic, the state has promulgated relevant policies to support the development of the cultural industry from multiple aspects such as finance, system, and finance. Although the pandemic has hindered people's travel, it cannot control the speed of online network dissemination. More and more new media have emerged, driving the development of the cultural industry during pandemic prevention and control. However, as various enterprises strive to enter the online market, the competition environment in the cultural industry is very fierce. Many traditional offline enterprises were eliminated by society due to the impact of the pandemic, but in just two short years, many successfully transformed cultural industries emerged. These enterprises mostly relied on the diversification strategy model to accelerate transformation and upgrade, and during the pandemic prevention period where resident consumption levels significantly increased, they also gained plentifully, obtaining more diversified development models and sources of income. For instance, the transformation made by Sanqi Mutual Entertainment Company during the pandemic control period is worth emulating by most game companies [3].
2. Simplified analysis and classification of diversification strategy
(1) Simplified analysis of diversification strategy
The diversification strategy was proposed by the pioneer of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategic model has been involved in the management policies of multiple countries, resulting in every enterprise big and small today seeking a place according to the development model of diversification strategy [4].
(2) Classification and meaning of diversification strategy
The diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The meanings of the four different modes derived from the diversification strategy also vary. Horizontal diversification refers to the enterprise utilizing the original conditions provided by the market to produce new products that can meet new user needs, thereby driving market consumption; vertical integration is the enterprise vertically deriving according to its own development situation and penetrating other market fields through the product industry chain to seek new consumers; concentric diversification pays more attention to the innovation of original technology and needs to produce new products within the original production range, with the whole process realized through the transformation of original technology; conglomerate diversification focuses more on expanding the scope of operations, where the enterprise needs to connect factors related to its own products, such as raw materials, technology, and markets, to expand its operational scope [5].
3. Impact of diversification strategy on game company performance
In the operation process of all game companies, the impact of the diversification strategy on game company performance can be broadly divided into two parts: changes in operating mode and shifts in strategic planning. The effectiveness of these changes gradually drives the performance improvement of the company. The impact of the diversification strategy is multifaceted. This paper will take Sanqi Mutual Entertainment Game Company as an example to analyze and study the impact of the diversification strategy on game company performance [6].
(1) Changes in operating mode
From the current perspective, the main operational scope of Sanqi Mutual Entertainment Game Company is very extensive. This 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 fully undertakes the development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years, keeping pace with the times and technological advancements, it continuously innovated, expanded the market to layout film, and anime subcultures, and is also shaping its market cultural industry chain in music, VR technology, and various types of live broadcasts, and other pan-entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development road was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise. Initially, Sanqi Mutual Entertainment's industrial chain did not involve game and other entertainment industry operations, always facing the risk of being annexed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. Accompanying later poor operation and market contraction, Sanqi Mutual Entertainment finally 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 formally acquired, for Sanqi Mutual Entertainment, this was an opportunity worth seizing. Under multi-party collaboration, the two companies completed the restructuring of various industrial assets. It is worth mentioning that the exhibition strategy that Sanqi Mutual Entertainment has been operating has already shown initial results at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural and creative company into a dual main business listed company with advanced production manufacturing and modern cultural creativity running parallel, and accordingly, the company's operational strategy was also changing. The scope of business covered by the original cultural and creative industry
