This Lord is Very Scientific-Chapter 706 - 638
(To prevent theft, will be posted in due time.) Abstract: With the advancement of technology and the model of intelligent network coverage, the rise of the game industry in recent years has been evident to all. The way games are disseminated is no longer confined to traditional promotional methods, and their influence gradually extends to all aspects of life. Correspondingly, game companies also need to continuously integrate resources, innovate and iterate, and improve performance in line with the rapid development of the times. A diversification strategy precisely meets the planning needs and development goals within the game industry. In the context of economic globalization, the diversification strategy, as the preferred development model for enterprises, is also applicable to gaming companies. This paper uses Sanqi Mutual Entertainment Company as an example to explain the impact of the diversification strategy on the performance of gaming companies.
Keywords: Diversification strategy; Gaming company; Performance; Impact; Sanqi Mutual Entertainment
Diversification strategy is a market strategy means adopted by enterprises in the course of operation to capture and develop new markets. It is also a strategic plan formed by enterprises to avoid risks encountered in operating a single business and to strategically and preparedly enter into new business fields. The practical application of a diversification strategy to gaming companies can effectively enhance company performance, leading to a process of cumulative qualitative changes in the development of gaming companies.
1. Macro Background of Diversification Strategy
Entering 2021, with the effective control of the pandemic by the state, people's lives return to normal, and the economic and cultural sectors show a promising trend of recovery. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the development of the national cultural industry has basically returned to pre-pandemic levels [1]. For the game industry, which accounts for a large proportion of the cultural industry, this is very favorable news. Although the pandemic did not significantly impact the game industry, the inability to conduct offline activities continuously affects the performance of gaming companies. The revival of the cultural industry indicates that for most gaming companies, the great development and prosperity of the cultural industry can promote and drive them onto a sustainable development path [2].
From last year's pandemic eruption to the current stabilization, the country has introduced relevant policies from finance, systems, finance, and other aspects to support the development of the cultural industry. The pandemic, though hampering people's travel, couldn't control the propagation speed of online networks. More and more new media emerged, driving the development of the cultural industry during the pandemic prevention period. However, due to numerous enterprises wanting to squeeze into the online market, the competitive environment among cultural industries is very intense. Many traditional offline businesses could not withstand the impact of the pandemic and were weeded out by society. Yet, in this short span of two years, many transformed cultural industries have emerged, most of which have accelerated transformation and upgrading through the diversification strategy mode. During the pandemic prevention period, with the significant improvement in residents' consumption levels, they also gained abundant results, obtaining more diversified development models and funding income channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period is worth following for most gaming 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 work "What is Corporate Strategy," he introduced the classification of diversification strategies. This influential strategic model is covered in the management policies of various countries so much so that today, enterprises big and small are seeking to establish a position following the development model of a diversification strategy [4].
(2) Classification and Implications of Diversification Strategy
The diversification strategy is divided into four types: Horizontal diversification, Vertical integration, Concentric diversification, and Conglomerate diversification. The four different modes derived from the diversification strategy have different meanings. Horizontal diversification refers to an enterprise using the original conditions provided by the market to produce new products that can meet new user demands, thereby driving market consumption. Vertical integration is the vertical derivation of an enterprise according to its development status, penetrating other market fields with the product industry chain to seek new consumer targets. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the existing production range. The whole process is achieved through the transformation of existing technology. Conglomerate diversification emphasizes the change in the range of operations more. An enterprise needs to link factors related to its products, such as raw materials and technology, as well as markets, to expand its operational scope [5].
3. Impact of Diversification Strategy on Gaming Company Performance
It can be said that in the operation process of all gaming companies, the impact of the diversification strategy on gaming company performance is generally divided into two parts: changes in operational models and shifts in strategic planning. From these two parts of transformation, effects gradually generate, driving the improvement of company performance. The impact brought by the 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 gaming company performance [6].
(1) Changes in Operational Models
So far, the main operating scope of Sanqi Mutual Entertainment Game Company is very broad. This is also the advantage brought by the diversification strategy. The company's business involves not only the operation of interactive entertainment but also covers mobile game and web game development and publishing. In recent years, with continuous innovation following the trend of technology, it has expanded its market to cover the layout of film and anime in the secondary dimension, as well as shaping its market cultural industry chain in music, VR technology, and various live streaming and other pan-entertainment businesses.
Founded in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth early developmental path. Its predecessor was a small company, and initially, Sanqi Mutual Entertainment's industrial chain did not involve the operation of games and other entertainment industries. There was always the risk of being swallowed by the market. However, by relying on the steady development of a single industry, Sanqi Mutual Entertainment Company became publicly listed in 2011, but in the wake of mismanagement in later operations and market contractions, Sanqi Mutual Entertainment eventually did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired a 60% stake in Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Although it was nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth seizing. The two companies completed various industrial asset restructurings through multi-party collaboration. It is worth mentioning that Sanqi Mutual Entertainment's strategic operations, always in development, had begun to shine at this time. Sanqi Mutual Entertainment Company transformed from a singular modern cultural and creative company before acquisition into a dual-main business listed company paralleled by advanced manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy also underwent changes. The business scope once covered by the cultural and creative industry...
