This Lord is Very Scientific-Chapter 711 - 643
(Anti-theft, to be released later.) Abstract: With the progress of technology and the coverage model of intelligent networks, the rise of the game industry in recent years is evident to the public. The dissemination modes of games are no longer confined to rigid promotional methods. The influence of games has gradually expanded to all aspects of life. Correspondingly, game companies also need to integrate resources, innovate, iterate, and improve performance with the rapid development of the times. Diversification strategy happens to meet the planning needs and development goals within the game industry. Against the backdrop of economic globalization, diversification strategy, as the preferred mode for enterprise development, is equally applicable to game companies. This article uses Sanqi Mutual Entertainment Company as an example to elucidate 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 strategy means adopted by enterprises in the operation process to occupy more new markets and explore new markets. It is also a strategic planning adopted by enterprises to avoid the risks encountered in the operation of a single business, targeted and prepared to enter new business fields. Applying diversification strategy to game companies can effectively improve company performance, bringing a process from quantitative change to qualitative change in game company development.
1. Macroeconomic Background of Diversification Strategy
Entering 2021, under the strong control of the pandemic by the government, people's lives are back on track, and the economic culture is also showing a booming recovery trend. On April 30, 2021, relevant data released by the National Bureau of Statistics showed that the development of the cultural industry nationwide basically returned to pre-pandemic levels[1]. This is very favorable news for the game industry, which accounts for a large proportion of the cultural industry. Although the arrival of the pandemic did not cause much impact on the game industry, the inability to conduct offline activities has continuously affected the performance of game companies. The warming of the cultural industry means that for most game companies, this can promote and drive more game companies onto the path of sustainable development[2].
From last year's outbreak of the pandemic to the current stabilization of the pandemic, the nation has introduced relevant policies from multiple aspects such as finance, institutions, and finance to support the development of the cultural industry. Although the pandemic has blocked people's footsteps, it cannot control the speed of online network dissemination. More and more new media emerged, driving the development of the cultural industry during the pandemic prevention and control period. However, due to various enterprises wanting to squeeze into the online market, the competitive environment among cultural industries became intense. Many traditional offline enterprises could not resist the impact of the pandemic and were eliminated by society at this time. But in this short period of two years, many successfully transformed cultural industries also emerged, and most of these enterprises accelerate transformation and upgrade rely on diversification strategy models, achieving abundant gains during the pandemic prevention and control period when the residents' consumption level significantly improved, obtaining more diversified development models and capital income channels. For example, Sanqi Mutual Entertainment Company's transformation during the pandemic prevention period is worth learning from 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 pioneer of strategic management. In his book "What is Corporate Strategy," he mentioned the classification of diversification strategy. This strategic model, which has influenced the world, has been involved in the policy of management guidelines in multiple countries, so today every enterprise, large or small, is seeking a place according to the development mode of diversification strategy[4].
(b) Classification and Its Meaning of Diversification Strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The four different modes derived from diversification strategy have different meanings. Horizontal diversification refers to companies using 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 vertical derivation based on the company's own development situation, using product industry chains to penetrate other market fields seeking new consumers; concentric diversification focuses more on the innovation of existing technology, requiring production of new products within existing production scope, realizing transformation through the mutation of existing technology; overall diversification emphasizes the change in expanding business scope, companies need to expand their business scope by contacting factors related to their own product raw materials, technology, and market[5].
3. The 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 the performance of game companies is uniformly divided into two parts: the change of operation mode and the shift of strategic planning. From the evolution of these two parts, the effects gradually generate to boost the company's performance improvement. The impact brought by 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 the performance of game companies[6].
(1) Change of Operational Mode
Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also relying on the advantages brought by diversification strategy. The company's business not only involves operating interactive entertainment, but also fully takes charge of the research and release of mobile games and web games under Sanqi Mutual Entertainment Game Company. In recent years of development, keeping pace with the times by innovate endlessly, broadening the market to layout film and television and anime ACG, and also shaping Sanqi Mutual Entertainment Game Company's market cultural industry chain in music, VR technology, and various live broadcasts and other pan-cultural businesses.
Founded in 1995, the development road of Sanqi Mutual Entertainment Game Company wasn't smooth at first. The precursor of Sanqi Mutual Entertainment Game Company was a small enterprise, initially, Sanqi Mutual Entertainment Company's industry chain did not involve the operation of games and other entertainment industries, always with the risk of being merged by the market. But relying on the steady development of single industry, Sanqi Mutual Entertainment Company was listed in 2011. However, along with poor operation and market tightening later, Sanqi Mutual Entertainment eventually 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. Despite being acquired nominally, for Sanqi Mutual Entertainment, this was a development opportunity worth grasping. The two companies completed asset restructuring of various industries under multi-party collaboration. It's worth mentioning that the strategy that Sanqi Mutual Entertainment always operates began to show its edge at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creativity company before being acquired to a dual-main business listed company of advanced production manufacturing and modern cultural creativity in parallel now. Correspondingly, Sanqi Mutual Entertainment Company's operating strategy also underwent changes, with the business scope covered by the original cultural creative industry.
