This Lord is Very Scientific-Chapter 717 - 649
(Anti-theft, post later.) Abstract: With the progress of technology and the coverage model of intelligent networks, the rise of the gaming industry in recent years is evident to the public. The dissemination mode of games is no longer confined to rigid publicity methods, and the influence of games has gradually expanded to all aspects of life. Corresponding game companies also need to continuously integrate resources, innovate, and improve performance in line with the rapid development of the times. A diversification strategy caters precisely to the planning needs and development goals within the gaming industry. Under the backdrop of economic globalization, diversification strategy as the preferred model for enterprise development is also applicable to game companies. This article illustrates the impact of diversification strategy on the performance of game companies, using Sanqi Mutual Entertainment Company as a case study.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment Company
Diversification strategy is a market strategic tool adopted by enterprises in the operation process to occupy new markets and expand new markets. It is also a strategic planning method used by enterprises to avoid risks encountered in operating a single business and enter new business fields in a targeted and prepared manner. Applying a diversification strategy to game companies can effectively improve company performance, bringing a process of transformation from quantitative change to qualitative change for the development of game companies.
1. Macro background of diversification strategy
Entering 2021, under the strong control of the pandemic by the state, people's lives have returned to normal, and the economic and cultural landscapes also show a great recovery. On April 30, 2021, according to related data published by the National Bureau of Statistics, the development of the national cultural industry basically restored to pre-pandemic levels[1]. This is great news for the gaming industry, which holds a significant proportion of the cultural industry. Although the pandemic arrival did not greatly impact the gaming industry, the inability to conduct offline activities has always affected the performance of game companies. With the cultural industry's revival, for most game companies, this signifies that the great development and prosperity of the cultural industry can promote and drive more game companies onto a path of sustainable development[2].
From the outbreak of last year's pandemic to now the pandemic being stable, the state has issued relevant policies from multiple aspects such as finance, system, and finance to support the development of the cultural industry. Although the pandemic has hindered people's travel, it cannot control the speed of online network dissemination. More and more new media appeared to drive the cultural industry's development during pandemic prevention and control. However, because various companies want to squeeze into the online market, the competitive environment in the cultural industry is very intense. Many traditional offline companies could not withstand the pandemic impact and were eliminated by society. But within these short two years, many successfully transformed cultural industries emerged, and these companies mostly relied on diversification strategy modes for accelerated transformation and upgrading, harvesting significant returns during the pandemic prevention and control period where residents' consumption levels significantly increased, obtaining a more diverse development model and funding income channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention and control period is worth referencing by most game companies[3].
2. Brief analysis and classification of diversification strategy
(A) Brief analysis of diversification strategy 𝗳𝐫𝚎𝗲𝚠𝚎𝗯𝕟𝐨𝘃𝚎𝗹.𝗰𝗼𝗺
Diversification strategy was proposed by the father of strategic management, Igor Ansoff, who mentioned the classification of diversification strategy in his book "What is Enterprise Strategy." This world-influencing strategy model is involved in management policies in multiple countries so that today every large and small enterprise seeks a place according to the development model of diversification strategy[4].
(B) Classification and meanings of diversification strategy
Diversification strategy is divided into four types: horizontal diversification, vertical integration, concentric diversification, and overall diversification. The meanings of the four different modes derived from diversification strategy also differ. Horizontal diversification refers to enterprises using the original conditions provided by the market to produce new products that satisfy new user needs, thus driving market consumption. Vertical integration is enterprises vertically deriving according to their development situation, using the product industry chain to penetrate other market fields to seek new consumption targets. Concentric diversification focuses more on the innovation of existing technology, requiring new product production within the existing production scope. The whole process is realized through the transformation of existing technology. Overall diversification pays more attention to the expansion of operating scope changes. Enterprises need to link factors related to their products, such as raw materials and technology, and market factors to expand the operating range[5].
3. Impact of diversification strategy on game company performance
It can be said that in the operation process of all game companies, the impact of diversification strategy on game company performance is uniformly divided into the change of operation mode and the transfer of strategic planning into two parts. Effects gradually emerge from the transformation of these two parts to promote the company's performance improvement. The influence brought by diversification strategy is multifaceted. This paper will analyze and study the impact of diversification strategy on game company performance, taking Sanqi Mutual Entertainment Game Company as an example[6].
(1) Change of operation mode
Currently, Sanqi Mutual Entertainment Game Company's main operating scope is very broad, which is also the advantage brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company also exclusively undertakes the development and distribution of mobile games and web games under its umbrella. In recent years of development, continuously innovating alongside the era's technology, expanding the market to layout film and anime sub-culture, also shaping the market cultural industry chain belonging to Sanqi Mutual Entertainment Game Company in pan-entertainment businesses like music and VR technology and various live streams.
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not completely smooth. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise. Initially, Sanqi Mutual Entertainment's industry chain did not involve operating games and other entertainment industries, constantly facing the risk of being swallowed by the market. However, relying on the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. But with the later unsatisfactory operation and market contraction, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired a 60% equity stake in Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. Despite being nominally acquired, for Sanqi Mutual Entertainment, this was a development opportunity worth grasping. The two companies completed asset restructuring of various industries through multi-party collaboration. It is worth mentioning that the exhibition strategy that Sanqi Mutual Entertainment has always operated already began to show its prowess at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before the acquisition to a dual-main business listed company operating both advanced production manufacturing and modern cultural creativity today, corresponding to which Sanqi Mutual Entertainment's company operating strategy also underwent changes, covering the business scope that once belonged to the cultural creative industry.
