Netflix expects to spend $18 billion on content in 2025, while Disney spent around $27 billion across all content in 2023, yet Netflix still maintains its streaming market leadership. Why?

One way to understand this is through a lens I call G.S.M — Guerrilla Strategic Management. The idea is simple: businesses that are native to their industries often move faster, innovate deeper, and adapt better than subsidiaries of larger corporations. Being native gives them agility and insider knowledge that even billion-dollar competitors struggle to match.

Before Netflix, streaming didn’t exist. By taking the risky leap from DVD rentals to digital streaming, they created an entirely new alternative to traditional TV. Looking at Netflix now and their main competitors; Disney +, Amazon Prime and Apple TV, all of these are subsidiaries of bigger companies with access to giant IP’s however, despite these big boys coming to the table, Netflix is still able to operate and even outperform those companies in some areas and that’s because they’re industry natives. These subsidies require top-down decisions from their parent companies which belong to different industries, giving Netflix a strategic edge.

The term ‘guerrilla’ comes from guerrilla warfare — where smaller, more agile forces outmanoeuvre larger armies by leveraging terrain, speed, and local knowledge. In business, industry natives often fight the same way.

Apple and Amazon are two companies with very diverse portfolios; both compete in the music industry in which they’re both narrowly losing out to Spotify who much like Netflix are a native in this industry. For Apple and Amazon having a decent share of the market in a variety of industries is the more viable approach. Spotify really pioneered playlist culture, podcast integration and algorithm-driven discovery, Apple and Amazon are just after a share of that pie and often offer their music services either as a discounted or included part of their other packages, appealing to users who wish to belong to a singular ecosystem. However, ‘music first’ consumers will tend to prioritise Spotify. Native companies capture the enthusiasts and core users, while subsidiaries compete for the ‘good enough’ market segment.

Youtube is an example of a bigger company acquiring a more innovative and fresh small business and successfully maintaining it’s agility. Google purchased Youtube at an optimal time and it was compatible with the ecosystem Youtube had already established. Google bought YouTube in 2006 when it was still early enough that the native culture and agility hadn’t calcified. They didn’t try to “fix” something that was already working.

Final word

In business, as in warfare, sometimes the best strategy isn’t to match your opponent’s resources, it’s to leverage the terrain you know best.

What G.S.M. examples have you observed in your industry? Where have you seen native companies outmanoeuvre larger competitors through agility and focus?

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Please feel free to give me any feedback either in the comments below or you can find me on twitter @TimPMInsights where I post regular insights, statistics and just my general thoughts on video games and similar industries.

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