Strategic partnerships between brands are as old as the establishment of the first businesses in the world.
Partnering is a very effective strategy to achieve goals that a business could never achieve on its own.
Business partnerships can allow brands to reach new markets, gain greater distribution, and attract more customers.
There are lots of successful strategic partnerships in the last decade that helped corporations struck gold including Starbucks and Spotify, Taco Bell and Doritos, Uber and Spotify, and CoverGirl and Lucasfilm, Studicus and BestEssayEducation.
All these partnerships helped established brands to achieve what they were hoping for.
However, despite the success of others in their strategic partnerships, some didn’t turn out too well and eventually failed miserably.
Whether the reason was a lack of vision, an ineffective decision-making process, financial implications, or partners that simply didn’t play well together, it seems like some famous companies didn’t find their perfect travel companion.
Here are 6 examples of failed partnerships between top corporations:
1. Heinz and McDonald’s
The world’s most famous fast-food chain and the very popular ketchup maker had a flourishing partnership for over 40 years. Perhaps the biggest case of betrayal that leads to a breakup in the business landscape is cheating one with their biggest competitor.
In the case of the strategic partnership between McDonald’s and Heinz, we are talking about a betrayal that involves an ally of McDonald’s famous competitor, Burger King.
After the former head of rival Burger king, Bernardo Hees, become the chief executive of Heinz, McDonald’s decided that it is time to look for another ketchup supplier for their delicious fries.
2. Kraft and Starbucks
Another ugly case of a breakup between two companies, which also ended with a series of accusations in the courtroom, is the strategic partnership between Kraft and Starbucks.
The partnership between these two brands dates back to 1998 when the retail grocery coffee business was as profitable as less than $50 million annual revenues.
Over time, the strategic partnership with the distribution partner Kraft has helped Starbucks grow its annual revenues to approximately $500 million. And the Starbucks company has also publicly acknowledged the benefits of their partnership in building their presence in grocery stores.
However, the magic didn’t last longer than 12 years until it ended with ugly accusations in the courtroom.
While Kraft company accused Starbucks of unilaterally deciding to end their agreement, Starbucks explains its decision as a consequence of the failure of the distributor to aggressively promote its brand.
3. LEGO and Shell
One of the longest partnerships that lasted and was flourishing for both parties involved is the one between LEGO and Shell company which dates back since 1960.
The partnership was based on Shell-branded LEGO sets for kids to play with. However, this partnership is different than all the others because the reason it has failed isn’t that it was not successful or the partners didn’t play well together.
Quite the opposite in fact because the marketing campaign the two companies were doing for each other was very successful.
What brought an end to this partnership is the involvement of the Greenpeace campaign in which the partnership was extremely criticized. The criticism was talking about the partnership between one of the biggest oil producers, who had some questionable environmental practices, and one of the most popular toy brands.
A series of questions about the environmental issues that these two companies may lead to have started to pop into the general public’s mind. Consequently, in 2011, the two companies have decided to end their partnerships to avoid all the bad rumors that could affect their brands.
4. U2 and Apple
Similar to the Shell-LEGO partnership, the strategic partnership between Apple and the rock band U2 seemed to be a successful pairing. The two famous names have partnered in 2004 for the first time when the band helped the iPod to gain a lot of popularity with their hit song called ‘Vertigo”. In 2004, the commercial was considered to be iconic and extremely successful.
Yet, a decade has passed and despite the enthusiasm of the two brands to pair together again, things didn’t go well at all. A decade later in 2014, Apple company has successfully introduced its latest iPhone model and Apple Watch, at that time, and considered that it is a great idea to announce their new partnership with the rock band.
The partnership was based on providing all iTunes users with an entire new U2 album free of all charges. It may have seemed like a remarkable offer for the two brands but in the eyes of Apple users, it was hardly an offer.
What experts think that made this partnership fail was the fact that users felt like their intimate space was intruded by it. One’s music collection is a very personal choice and it is considered that the two brands were naive to think that users will respond well to this “offer”.
5. Apple Pay and PayPal
The Apple Pay and PayPal partnership looked so promising during the negotiation time for the two parties involved.
PayPal was expected to be included in Apple’s new payment platform Apple Pay. However, this partnership is another case of betrayal in the business landscape that ended with a failed partnership.
When Apple found out that the payment platform has already partnered with Samsung, one of their biggest rivals, during negotiations, PayPal was excluded and the partnership ended sooner than it was ever expected.
Ultimately, the Payment platform has been integrated with Samsung’s Galaxy S5 model which has a fingerprint scanner very similar to the one from Apple Company.
6. eBay and PayPal
Not exactly the type of partnership that starts between two well-established company as eBay was PayPal’s parent company, but the eBay and PayPal collaboration also ended miserably.
PayPal was real jewelry for the eBay business for a long time until the two companies decided to split permanently.
The payment platform PayPal has been replaced by eBay with Adyen, a much smaller brand, as its primary payment provider.
The decision of the two companies was extremely controversial for the general public since the PayPal platform is a well-established and market leader compared with the smaller Adyen business. However, eBay has claimed that their decision was purely based on their intentions to provide their merchants with lower costs and more control over their finances.
However, in order to make the transition easier for its users, eBay has allowed consumers to use PayPal payment services until July 2023 although most payments are expected to be processed using Ayden by 2021.
The fine art of partnering can be a slippery road for companies. And, as in the examples above, some partnerships are simply not meant to be successful. Whether it is due to the lack of vision, a painful betrayal for an industry rival or goals that are no longer mutual, some partnerships are doomed to fail.