This Lord is Very Scientific-Chapter 705 - 637
(Anti-theft, will be published later.) Abstract: With the progress of technology and the coverage of intelligent networks, the rise of the gaming industry in recent years is evident to all. The spread of games is no longer confined to traditional promotional methods, and the influence of games has gradually expanded to all aspects of life. Correspondingly, gaming companies need to continuously integrate resources, innovate, and improve performance in line with the rapid development of the times. A diversification strategy aligns perfectly with the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy, as the preferred mode of enterprise development, is also applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategy approach adopted by enterprises during their operational process to capture more new markets and explore new market segments. It is also a strategic plan used by companies to enter new business fields in a targeted and prepared manner while avoiding the risks encountered in operating a single business. Applying the diversification strategy to gaming companies can effectively improve company performance, bringing about a transformation from quantitative change to qualitative change for the development of gaming companies.
1. The Macroeconomic Background of Diversification Strategy
Entering 2021, with the effective control of the pandemic by the state, people's lives are back on track, and the economic and cultural sectors are showing signs of a robust recovery. On April 30, 2021, according to data released by the National Bureau of Statistics, the development of the national cultural industry had basically returned to pre-pandemic levels [1]. This is highly favorable news for the gaming industry, which holds a significant share in the cultural industry. Although the pandemic did not heavily impact the gaming industry, the inability to conduct offline activities always affected the performance of gaming companies. The recovery of the cultural industry suggests to most gaming companies that the great development and prosperity of the cultural industry can stimulate more gaming companies to embark on a path of sustainable development [2].
From the outbreak of the pandemic last year to the current pandemic stability, the state has introduced relevant policies in terms of finance, regulations, and banking to support the development of the cultural industry. Although the pandemic has halted 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 the pandemic prevention period. However, the intense competition in the cultural industry is due to every company wanting to squeeze into the online market. Many traditional offline companies could not withstand the effects of the pandemic and were eliminated by society. Nevertheless, within these short two years, numerous cultural industries have successfully transformed, largely relying on the acceleration of the transformation and upgrading brought about by the diversification strategy. In the period of significantly improved consumer spending during pandemic prevention, they also achieved substantial gains, gaining more diverse development models and sources of income. For instance, the transformation undertaken by Sanqi Mutual Entertainment during the pandemic is worth learning from for most gaming companies [3].
2. An Analysis and Classification of Diversification Strategy
(a) A Brief Analysis of Diversification Strategy
The diversification strategy was proposed by the father of strategic management, Igor Ansoff, in his book "Corporate Strategy." He mentioned the classification of diversification strategy, and this globally influential strategic model has been involved in the management policies of various countries, so that today every company, big or small, is seeking to find their place according to the development model of diversification strategy [4].
(b) The Classification and Meaning of Diversification Strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and conglomerate diversification. The four different models derived from the diversification strategy have distinct meanings. Horizontal diversification refers to producing new products that meet new user demands using the primary conditions provided by the market, driving market consumption. Vertical integration involves enterprises branching out vertically based on their development circumstances, using the product supply chain to penetrate other market fields, seeking new consumer groups. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production scope, achieving it through the transformation of the existing technology. Conglomerate diversification emphasizes the change in the expansion of operational scope. Enterprises need to link up with raw materials, technology, and market factors related to their own products to expand the operational scope [5].
3. The Impact of Diversification Strategy on the Performance of Gaming Companies
In the operational process of all gaming companies, it can be said that the impact of diversification strategy on the performance of gaming companies is generally divided into two parts: the change of operational models and the shift of strategic planning. The effects gradually generated by these two parts can enhance company performance. The impact brought about by diversification strategy is multifaceted. This paper will use Sanqi Mutual Entertainment Game Company as an example to research and analyze the impact of diversification strategy on the performance of gaming companies [6].
(1) Change in Operational Models
At present, the main operational scope of Sanqi Mutual Entertainment Game Company is very extensive, which 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 oversees the development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years, following the constantly evolving technology of the times, Sanqi Mutual Entertainment Game Company has expanded its market layout to include film, animation, and second-dimension segments, and is also shaping its market cultural industry chain in music, VR technology, and various broad entertainment businesses like live streaming.
Sanqi Mutual Entertainment Game Company was established in 1995, but the initial development path was not smooth. Initially, Sanqi Mutual Entertainment Game Company's business chain did not involve the operation of games or other entertainment industries, always facing the risk of being swallowed by the market. However, by relying on the stable development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. However, with poor post-operation management and market contraction, Sanqi Mutual Entertainment did not ultimately escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of the shares of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although nominally acquired, for Sanqi Mutual Entertainment, it was an opportunity worth seizing. The two companies completed the asset restructuring of various industries through multi-party collaboration. It is worth mentioning that the evolving strategy operated by Sanqi Mutual Entertainment had already begun to show its strengths. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual main business listed company balancing advanced manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy has also changed, and the original business scope covered by the cultural creative industry has...
