This Lord is Very Scientific-Chapter 698 - 630
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(Anti-theft, will post later.) Abstract: With technological advancements and the coverage model of intelligent networks, the rise of the gaming industry in recent years is visible to the public. The dissemination methods of games are no longer confined to traditional promotional modes, and the influence of games has gradually expanded to various aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate updates, and improve performance to keep pace with the rapid development of the era. The diversification strategy aptly meets the planning needs and development goals within the gaming industry. Under the backdrop of economic globalization, diversification strategy as the primary choice for enterprise development is equally applicable to game companies. This paper uses Sanqi Mutual Entertainment Company as an example to elaborate on the impact of diversification strategy on game company performance.
Keywords: Diversification Strategy; Game Company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic means that enterprises adopt during operations to occupy more new markets and develop new markets. It is also a strategic plan for enterprises to avoid risks encountered during the operation of a single business and to enter new business fields with focus and preparation. Practical application of diversification strategy in game companies can effectively improve company performance, bringing a process of quantitative to qualitative change for the development of game companies.
1. Macroeconomic Background of Diversification Strategy
Entering 2021, with the nation's effective control of the pandemic, people's lives are back on track, and the economy and culture show a promising situation of recovery. On April 30, 2021, according to relevant data announced by the National Bureau of Statistics, the development of the national cultural industry has basically returned to pre-pandemic levels [1]. This is quite beneficial news for the gaming industry, which occupies a large proportion of the cultural industry. Although the onset of the pandemic did not significantly affect the gaming industry, the inability to conduct offline activities continually impacted 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 drive more game companies onto a path of sustainable development [2].
From last year's outbreak of the pandemic to the current stabilization, the government has issued relevant policies from various aspects such as finance, systems, and finance to support the development of the cultural industry. Although the pandemic blocked people's travel, it could not control the speed of online network dissemination. More and more new media have emerged, promoting cultural industry development during the pandemic prevention period. However, as each enterprise attempts to squeeze into the online market, the competitive environment within the cultural industry becomes extremely fierce. Many traditional offline enterprises succumbed to the impact of the pandemic and were eliminated by society. Yet, numerous successful transformations in the cultural industry emerged in this short two-year period, largely relying on the acceleration of transformation and upgrading through the diversification strategy mode. During the pandemic prevention period, with significantly increased resident consumption levels, they achieved considerable gains and acquired more diversified development modes and sources of income, for instance, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worthy of reference for most game companies [3].
2. Brief Analysis and Classification of Diversification Strategy
(a) Brief Analysis of Diversification Strategy
Diversification strategy was proposed by Igor Ansoff, the progenitor of strategic management. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategy. This influential global strategic model is involved in the management policies of multiple countries, leading every large and small enterprise today to seek a place through the development model of diversification strategy [4].
(b) Classification and Meaning of Diversification Strategy 𝐟𝚛𝕖𝚎𝕨𝗲𝐛𝚗𝐨𝐯𝐞𝕝.𝐜𝗼𝗺
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 distinct meanings: horizontal diversification refers to the enterprise using the original conditions provided by the market to produce new products that meet new user needs, thereby driving market consumption. Vertical integration is when an enterprise vertically derives based on its development, using product industry chains to infiltrate other market fields and seek new consumption targets. Concentric diversification emphasizes innovation within the existing technology, requiring the production of new products within the current production scope, realizing the entire process through the transformation of existing technology. Conglomerate diversification focuses more on expanding changes in the business scope, requiring enterprises to connect factors such as raw materials, technology, and market issues related to their own products for expansion of the operating range [5].
3. Impact of Diversification Strategy on Game Company Performance
It can be said that throughout the operations of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: changes in the operating model and shifts in strategic planning. These two parts of change gradually produce effects that drive performance improvement. The impact of 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 the Operating Model
Currently, the primary operating scope of Sanqi Mutual Entertainment Game Company is quite extensive, which is attributed to the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment but also encompasses the development and issuance of mobile games and web games handled solely by Sanqi Mutual Entertainment Game Company. Furthermore, in recent years' development, keeping up with technological advancements and continuously innovating, it has broadened the market layout to films and anime in the ACG realm, and also shapes the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company within general entertainment businesses such as music, VR technology, and various live streaming.
Sanqi Mutual Entertainment Game Company was established in 1995, but its early development path was not smooth sailing. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise, initially, Sanqi Mutual Entertainment's industry chain did not involve operations in the entertainment industry such as gaming, always facing the risk of being swallowed by the market. However, thanks to the stable development of a singular industry, Sanqi Mutual Entertainment Company was listed in 2011. But with poor later operation and market compression, Sanqi Mutual Entertainment ultimately could 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 nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth grasping. Under collaborative efforts in multiple facets, the two companies completed various industry asset restructurings. It is worth mentioning that the strategic operation that Sanqi Mutual Entertainment has always run began to show initial results at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before acquisition to now a dual-listed company that concurrently operates advanced manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment is also undergoing changes, with formerly covered business areas of the cultural creative industry.
