This Lord is Very Scientific-Chapter 703 - 635
(Anti-theft, send later.) Abstract: With the advancement of technology and the model of intelligent network coverage, the emergence of the game industry in recent years has been witnessed by the public. The way games are disseminated no longer adheres to rigid promotional methods, and the influence of games has gradually expanded to various aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate, and improve performance in line with the rapid development of the times. The diversification strategy perfectly meets the planning needs and development goals within the game industry. Under the backdrop of economic globalization, the diversification strategy, as a preferred development model for enterprises, is also applicable to game companies. This article, using Sanqi Mutual Entertainment Company as an example, explains 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 in the operation process to capture new markets and open up new market areas. It is also a strategic plan that enterprises use to avoid risks encountered in the operation of a single business and to enter new business fields with targeted preparation. The practical application of the diversification strategy in game companies can effectively improve company performance and bring about a process of transformation from quantitative to qualitative change in the development of game companies.
1. The macro 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 presented a thriving recovery scenario. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry basically returned to the pre-pandemic level [1]. This is very favorable news for the game industry, which holds a large proportion within the cultural industry. Although the arrival of the pandemic did not cause significant impact to the game industry, the inability to conduct offline activities has always affected the performance of game companies. The recovery of the cultural industry means that for most game companies, the great development and prosperity of the cultural industry can promote and drive more game companies to embark on a path of continuous development [2].
From last year's pandemic outbreak to the current pandemic stabilization, the state has promulgated relevant policies from various aspects such as finance, system, and insurance to support the development of cultural industries. Although the pandemic has blocked people's travel, it cannot control the spreading speed of the online network. More and more new media have emerged, driving the development of cultural industries during the pandemic prevention period. However, due to each company wanting to squeeze into the online market, the competition environment within cultural industries has become very fierce. Numerous traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. But within these short two years, several successfully transformed cultural industries have emerged. These enterprises mostly relied on the diversification strategy model to accelerate transformation and upgrading, harvesting significant gains during the period when residents' consumption levels significantly increased during pandemic prevention, obtaining more diversified development models and fund income channels. For example, the transformation undertaken by Sanqi Mutual Entertainment Game Company during pandemic prevention is worth learning from by most game companies [3].
2. Brief analysis and classification of diversification strategy
(1) Brief analysis of diversification strategy
Diversification strategy was proposed by Igor Ansoff, the pioneer of strategic management, in his book "Corporate Strategy: An Analytic Approach to Business Policy for Growth and Expansion" that mentioned the classification of diversification strategies. This globally influential strategic model is involved in management policies across various countries, resulting in every enterprise, large or small, seeking a place according to the development model of diversification strategy today [4].
(2) Classification and meaning of diversification strategy
Diversification strategy is classified into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different modes derived from diversification strategy also have varied meanings. Horizontal diversification refers to enterprises 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 when enterprises vertically derive according to their development situation, infiltrating product industry chains into other market fields to seek new consumer targets; concentric diversification focuses more on innovation of original technology, requiring the production of new products within the original production range, realizing transformation through the metamorphosis of original technology; overall diversification emphasizes expanding operational range changes, requiring enterprises to link relevant factors such as raw materials, technology, and market associated with their products to expand the operational range [5].
3. Impact of diversification strategy on the performance of game companies
It can be said that in the operational process of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: changes in operational mode and shifts in strategic planning. These two parts' transformations gradually produce effects that drive the improvement of company performance. The impacts brought by diversification strategy are multifaceted. This paper will analyze and study the impact of diversification strategy on the performance of game companies, using Sanqi Mutual Entertainment Game Company as an example [6].
(1) Changes in operational mode
Currently, the main operational scope of Sanqi Mutual Entertainment Game Company is very broad, which is an advantage brought by the diversification strategy. The company's business not only involves interactive entertainment operation but also covers the research and distribution of mobile games and web games. In recent years, keeping up with technological advancements, Sanqi Mutual Entertainment Game Company has continuously innovated, expanding the market layout to film and television, anime, and the second-dimensional industries. It has also shaped its own market cultural industry chain within music, VR technology, and various entertainment businesses such as live streaming.
Sanqi Mutual Entertainment Game Company was founded in 1995, but the early development road was not smooth. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise, which initially did not involve game or entertainment industry operations in its industrial chain, always being at risk of market annexation. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011, but with subsequent operational mishaps and market tightening, Sanqi Mutual Entertainment eventually could not escape the fate of acquisition.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a sixty percent equity acquisition. Despite nominal acquisition, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. Through multi-party cooperation, the two companies completed the asset restructuring of various industries. It is worth mentioning that the strategic plan consistently operated by Sanqi Mutual Entertainment has already begun to show prominence at this time, transforming from a single modern cultural creative company before the acquisition to today's dual-main business listed company of advanced manufacturing and modern cultural creative, corresponding to changes occurring in Sanqi Mutual Entertainment's company operating strategy, with the original scope of business covered by the cultural creative industry.
