This Lord is Very Scientific-Chapter 719 - 651
(Anti-theft, to be posted 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 methods of games are no longer confined to stereotypical promotional models, and the influence of games has gradually expanded to various aspects of life. Correspondingly, gaming companies also need to continually integrate resources, innovate, and enhance performance with the rapid development of the times. A diversification strategy accurately meets the planning needs and development goals within the gaming industry. In the context of economic globalization, diversification strategy, as a preferred model for enterprise development, is equally applicable to gaming companies. This article uses Sanqi Mutual Entertainment Company as an example to illustrate 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 means adopted by enterprises in their operation process to capture and explore new markets, and it is also the strategic planning used when enterprises need to avoid risks encountered during the operation of a single business and aim to enter new fields with direction and preparation. Applying the diversification strategy to gaming companies can effectively enhance company performance, bringing about a transition from quantitative to qualitative change in the development of gaming companies.
1. The macro background of diversification strategy
Entering 2021, under the effective control of the pandemic by the state, people's lives have returned to normal, and the economic culture is showing a great recovery. On April 30, 2021, according to relevant data released by the National Bureau of Statistics, the national cultural industry development has basically recovered to pre-pandemic levels[1]. This is very favorable news for the gaming industry, which accounts for a large proportion of the cultural industry. Although the pandemic did not have a significant impact on the gaming industry, the inability to conduct offline activities always affects the performance of gaming companies. With the resurgence of the cultural industry, this implies for most gaming companies that the great development and prosperity of the cultural industry can promote and lead more gaming companies onto the path of sustainable development[2]. 𝐟𝗿𝐞𝚎𝚠𝐞𝚋𝕟𝐨𝚟𝐞𝕝.𝕔𝕠𝚖
From last year's outbreak of the pandemic to the current stabilization, the state has implemented supportive policies for the development of the cultural industry from multiple aspects such as finance, system, and finance. Although the pandemic has hindered 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 and control period. However, the competitive environment within the cultural industry is very intense due to various enterprises wanting to squeeze into the online market. Many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society, but in this short two-year period, many successful transformations in the cultural industry have emerged. Most of these enterprises relied on a diversification strategy mode to accelerate transformation and upgrading, and they also gained significantly in terms of diversified development modes and funding income channels during the pandemic prevention and control period when consumer levels significantly increased. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention and control period is worth emulating by most gaming companies[3].
2. Brief analysis and classification of diversification strategy
(1) Brief analysis of diversification strategy
Diversification strategy was proposed by the father of strategic management, Igor Ansoff. In his book "Corporate Strategy," he mentioned the classification of the diversification strategy. This globally influential strategic model is involved in the management policies of many countries, so much so that today every enterprise, large and small, seeks a place according to the development model of diversification strategy[4].
(2) 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 modes derived from the diversification strategy have different meanings. Horizontal diversification refers to the production of new products that can meet new user demands using the original conditions provided by the market, thus driving market consumption. Vertical integration is the vertical derivation of enterprises based on their development situations, infiltrating other market fields through the product industry chain to seek new consumers. Concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the original production scope, achieved through the metamorphosis of original technology. Conglomerate diversification emphasizes the variation in expanding the business scope, requiring enterprises to expand the business scope by linking factors related to their products, such as raw materials and technology, and the market[5].
3. The impact of diversification strategy on the performance of gaming companies
It can be said that in the operation process of all gaming companies, the impact of diversification strategy on gaming company performance is uniformly divided into two parts: the change in operating mode and the shift in strategic planning. The changes in these two parts gradually produce effects, driving the company's performance improvement. The impact of the diversification strategy is multi-dimensional. 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 the operating model
Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is very extensive, which is also reliant on the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but Sanqi Mutual Entertainment Game Company is also fully responsible for the development and distribution of mobile and web games. In recent years, it continues to innovate in line with the developments in technology, expanding the market to include film and anime, and shaping its market culture industry chain in music, VR technology, and various pan-entertainment businesses like live streaming.
Founded in 1995, Sanqi Mutual Entertainment Game Company did not have a smooth path in its initial development. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, and initially, the industry chain of Sanqi Mutual Entertainment did not involve game and other entertainment industry operations, and there was always the risk of being merged by the market. However, with the steady development of a single industry, Sanqi Mutual Entertainment Company went public in 2011. But due to poor subsequent operations and market contractions, Sanqi Mutual Entertainment ultimately did not escape 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 acquired in name, it was a development opportunity worth seizing for Sanqi Mutual Entertainment. With multi-faceted cooperation, the two companies completed the asset reorganization of various industries. It is worth mentioning that the strategy constantly operated by Sanqi Mutual Entertainment began to show its edge at this time. Sanqi Mutual Entertainment Company transitioned from a single modern cultural creativity company before the acquisition to the present dual-listed company of advanced production manufacturing and modern cultural creativity, and correspondingly, the company's operational strategy was also changing, covering the business scope of the original cultural creativity industry.
