This Lord is Very Scientific-Chapter 729 - 661
(Anti-theft, to be released later.) Abstract: Accompanied by technological advancement and smart network coverage, the rise of the game industry in recent years has been evident to the public. The dissemination of games is no longer confined to rigid promotional models, and the influence of games has gradually expanded to all aspects of life. Correspondingly, game companies need to continuously integrate resources, innovate and renew, and improve performance in line with the rapid development of the times. Diversification strategy precisely meets the planning needs and development goals within the game industry. Against the backdrop of economic globalization, diversification strategy, as the preferred mode of enterprise development, is equally applicable to game companies. This paper explains the impact of diversification strategy on game company performance by taking Sanqi Mutual Entertainment Company as an example.
Keywords: Diversification strategy; Game company; Performance; Impact; Sanqi Mutual Entertainment
Diversification strategy is a market strategy adopted by enterprises in the process of operation to capture and develop new markets as well as to avoid risks encountered in operating a single business. It is a strategic planning method for entering new business fields with focus and preparation. Applying diversification strategy to game companies can effectively improve company performance, bringing about a transformation from quantitative change to qualitative change for the development of game 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 and cultural sectors are showing a great 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]. This is very favorable news for the game industry, which occupies a significant proportion of the cultural industry. Although the advent of the pandemic did not significantly affect the game industry, the inability to conduct offline activities has always affected the performance of game companies. With the warming of the cultural industry, this means for most game companies that the great development and prosperity of the cultural industry can promote and drive more game companies to embark on the road of sustainable development [2].
From the outbreak of last year's pandemic to the current stability, the country has issued relevant policies from multiple aspects such as finance, institutions, 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. Increasing new media have emerged, driving the cultural industry's development during pandemic prevention and control, but due to the intense competition environment among cultural industries as all enterprises want to enter the online market, many traditional offline enterprises could not withstand the impact of the pandemic and were eliminated by society. Nevertheless, within just these two years, many successfully transformed cultural industries have emerged, most of which have relied on diversification strategies to accelerate transformation and upgrading. They have also gained significantly during the pandemic prevention and control period when residents' consumption levels have increased significantly, obtaining more diverse development models and revenue channels. For example, the transformation made by Sanqi Mutual Entertainment during the pandemic prevention and control period is worth learning from for most game 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 diversification strategies. This world-influencing strategic mode is involved in the management guidelines and policies of multiple countries, so much so that today every enterprise, big or small, is seeking 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 total diversification. The four different modes derived from diversification strategy mean different things. Horizontal diversification refers to the production of new products that meet new user needs by using the original conditions provided by the market, thereby driving market consumption; vertical integration means that enterprises develop vertically according to their own development conditions, using product industry chains to penetrate other market fields and seek new consumers; concentric diversification focuses more on the innovation of existing technology, requiring the production of new products within the original production range, achieving this through the transformation of existing technology; and total diversification emphasizes expanding the scope of operations, requiring enterprises to connect factors such as raw materials, technology, and markets related to their own products to expand the scope of operations [5].
3. The Impact of Diversification Strategy on Game Company Performance
It can be said that during the operation of all game companies, the impact of diversification strategy on game company performance is uniformly divided into two parts: changes in operation mode and shifts in strategic planning. From the evolution of these two parts, effects gradually occur, driving the improvement of the company's performance. The impact of diversification strategy is multifaceted, and this paper will analyze and study the impact of diversification strategy on game company performance using Sanqi Mutual Entertainment Game Company as an example [6].
(1) Changes in Operation Mode
Currently, the main operating scope of Sanqi Mutual Entertainment Game Company is very extensive, owing to the advantages brought by diversification strategy. The company not only involves interactive entertainment operations but also covers the development and distribution of mobile games and web games under Sanqi Mutual Entertainment Game Company. Moreover, in recent developments, they have continuously innovated in line with modern technology, expanding the market to layout film and animation, as well as in music and VR technology and various live broadcasts, shaping the market cultural industry chain that belongs to Sanqi Mutual Entertainment Game Company in the pan-entertainment business.
Sanqi Mutual Entertainment Game Company was established in 1995, but the early development path was not smooth. The predecessor of Sanqi Mutual Entertainment Game Company was a small enterprise, initially with no involvement in gaming and other entertainment industry operations within the industrial chain. There was always a 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. Still, with poor later operations and a shrinking market, Sanqi Mutual Entertainment ultimately did not escape the fate of being acquired.
In 2014, Wuhu Shunrong Auto Parts Co., Ltd. acquired Shanghai Sanqi Mutual Entertainment Technology Co., Ltd. with a 60% stake. Although nominally acquired, this was a development opportunity worth grasping for Sanqi Mutual Entertainment. Under multi-party cooperation, the two companies completed asset restructuring of various industries. It is worth mentioning that the exhibition strategy that Sanqi Mutual Entertainment had been operating began to show promise at this time. Sanqi Mutual Entertainment Company transformed from a single modern cultural creative company before acquisition to a listed company with dual main businesses of advanced production manufacturing and modern cultural creativity, corresponding to changes in the company's operational strategy. The original scope of business covered by the cultural creative industry.
