This Lord is Very Scientific-Chapter 728 - 660
(Anti-theft, to be published later.) Abstract: With the progress of technology and the coverage model of the intelligent network, the recent rise of the gaming industry is evident to all. The dissemination method of games is no longer confined to rigid promotional models, and the influence of games is gradually expanding to all aspects of life. Correspondingly, game companies also need to continuously integrate resources and innovate with updates to improve performance along with the rapid development of the times. The diversification strategy perfectly caters to the planning needs and development goals within the gaming industry. Against the backdrop of economic globalization, the diversification strategy as the preferred model for enterprise development is equally applicable to game companies. This article takes Sanqi Mutual Entertainment Company as an example to explain the impact of diversification strategies on the performance of game companies.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment Company
A diversification strategy is a market strategy tool adopted by enterprises in the operating process to capture more new markets and develop new markets. It is also a strategic plan for enterprises to avoid risks encountered during the operation of a single business and to enter new business fields with focus and preparation. Applying diversification strategies to game companies can effectively improve company performance, leading the development of game companies from quantitative to qualitative change.
1. The macro background of the diversification strategy
As we enter 2021, with effective national control of the pandemic, people's lives have returned to normal. Economic and cultural aspects also show a promising state of recovery. On April 30, 2021, according to relevant data published by the National Bureau of Statistics, the development of the national cultural industry has basically returned to the pre-pandemic level[1]. For the gaming industry, which occupies a large portion of the cultural industry, this is very favorable news. Although the arrival of the pandemic did not cause much impact on the gaming industry, the inability to carry out offline activities has always affected the performance of game companies. The recovery of the cultural industry means that the grand development and prosperity of the cultural industry can promote more game companies towards sustainable development[2].
From last year's outbreak of the pandemic to the current stabilization, the country has issued relevant policies in finance, institutions, and finance to support the development of the cultural industry. Although the pandemic blocked people's travel, it could not control the speed of online network dissemination. More and more new media emerged, driving the development of the cultural industry during pandemic prevention and control. However, since every enterprise wants to squeeze into the online market, the competitive environment between cultural industries is very intense. Many traditional offline enterprises could not withstand the pandemic impact and were eliminated by society, but during these short two years, many successfully transformed cultural industries have emerged. Most of these companies accelerated transformation and upgrading relying on the diversification strategic mode, achieving abundant harvests during the pandemic prevention and control period when the residents' consumption level increased significantly, obtaining more diverse development modes and channels for income, such as the transformation made by Sanqi Mutual Entertainment during the pandemic prevention period, which is worth emulating by most gaming companies[3].
2. Simple analysis and classification of the diversification strategy
(1) Simple analysis of the diversification strategy
The diversification strategy was proposed by Igor Ansoff, the founder of strategic management. In his book "Corporate Strategy," he mentioned the classification of diversification strategy. This world-influencing strategic model has been involved in the management policies of many countries, so that today every large and small enterprise is seeking a place according to the development model of the diversification strategy[4].
(2) The classification and meaning of the 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 means producing new products that can meet new user needs using the original conditions provided by the market, thereby driving market consumption; vertical integration is the enterprise's longitudinal derivation based on its development situation, using the product industry chain to penetrate other market fields to seek new consumers; concentric diversification focuses more on the innovation of original technology, needing to produce new products within the original production range, achieving through the transformation of original technology; conglomerate diversification focuses more on expanding the scope of business changes, requiring the enterprise to connect related raw materials and technologies, as well as market and other factors corresponding to its products, to expand the scope of business[5].
3. The impact of the diversification strategy on the performance of game companies
In all game company operations, it can be said that the impact of the diversification strategy on game company performance is collectively divided into two parts: changes in the operating model and the transfer of strategic planning. From these two parts of change, effects gradually arise to drive the improvement of company performance. The impact of diversification strategies is multi-faceted. This paper will analyze and study the impact of diversification strategies on game company performance using Sanqi Mutual Entertainment Game Company as an example[6].
(1) Changes in the operating model
So far, the main operational scope of Sanqi Mutual Entertainment Game Company is very broad, which is also the result of the advantages brought by the diversification strategy. The company's business not only involves the operation of interactive entertainment, but the research and development and issuance of mobile games and web games under Sanqi Mutual Entertainment Game Company are also entirely undertaken. In recent years, through continuous innovation in line with the technology of the times, the market has been broadened to include the layout of film, television, and anime ACG (animation, comics, and games). It also shapes the market cultural industry chain that belongs to Sanqi Mutual Entertainment Game Company within music, VR technology, and various live streaming and other pan-entertainment businesses.
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth. Sanqi Mutual Entertainment Game Company's predecessor was a small enterprise. Initially, Sanqi Mutual Entertainment's industry chain did not involve the operation of the gaming and other entertainment industries, always 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 in the face of poor post-operations and market contraction, Sanqi Mutual Entertainment ultimately failed to avoid the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired 60% of Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. shares. Despite being acquired nominally, for Sanqi Mutual Entertainment, this was a developmental opportunity worth seizing. The two companies completed asset restructuring of various industries through multi-party collaboration. It is worth mentioning that the strategic operations Sanqi Mutual Entertainment had always operated began to show prominence at this time. From being a single modern cultural creative company before being acquired, it transformed to a dual main business listed company advancing in parallel with advanced production manufacturing and modern cultural creativity. Correspondingly, the company's operational strategy of Sanqi Mutual Entertainment also underwent changes, with the business scope covered by the original cultural creative industry.
