How strategic partnerships can make or break a business.

break a business

What is Strategic Partnership 

Strategic partnerships are collaborations between two or more businesses that work together towards a common goal. These partnerships play a crucial role in the success or failure of a business. 

Typically, it is formed between two enterprises when they each have one or more company assets or experience that will benefit the other by boosting their respective businesses. This could also imply that one company is providing some knowledge to assist the other company in expanding its market into other markets. 

A strategic partnership can bring many benefits such as increased revenue, access to new markets and shared resources. However, if not managed properly it can also lead to conflicts and ultimately harm both the parties involved. 

Benefits of Strategic Partnerships 

  •  Access to new marketsBy partnering with another business, you can tap into their existing customer base and expand your reach. 
  • Shared Resources and Cost Savings Strategic partnerships enable organizations to pool their resources, such as technology, infrastructure, or manufacturing capabilities, resulting in cost savings and operational efficiencies. 
  • Access to Expertise and Knowledge Partnering with another organization allows companies to tap into the expertise, experience, and specialized knowledge of their partners. 

Challenges of Strategic Partnerships 

  •  Managing expectations – Both parties need to have a clear understanding of what they hope to achieve and how they will work together to accomplish those goals. 
  • Trust and Relationship Building – It’s important for both parties to be transparent about their intentions and to communicate openly throughout the partnership. Failure to do so can lead to misunderstandings and conflicts. 
  • Risk of Dependency and Control – Partnerships involve a level of interdependence, which can create risks if one partner becomes overly dependent on the other or if power dynamics are imbalanced. 

Examples of Successful Strategic Partnerships 

One example of a successful strategic partnership is the collaboration between Apple and Nike. One of the earliest collaborations between Apple and Nike was the Nike+ iPod initiative, launched in 2006. This integration allowed Nike+ shoes to communicate wirelessly with an iPod device, enabling users to track their running performance, distance, and calories burned. 

Another example is the partnership between Starbucks and Barnes & Noble. This collaboration aimed to combine the strengths of both companies to create a more inviting and engaging environment for book lovers and coffee enthusiasts alike. 

One key aspect of the partnership was the introduction of Starbucks cafes within Barnes & Noble stores. These cafes offered a wide range of Starbucks beverages, including the popular coffees, teas, and specialty drinks. This addition provided customers with the opportunity to relax, read, and enjoy their favourite Starbucks beverage while browsing through books 

Examples of Failed Strategic Partnerships 

One example of a failed strategic partnership is the collaboration between Blockbuster and Enron. Blockbuster and Enron entered into a strategic partnership in the late 1990s with the aim of revolutionizing the home entertainment industry. The primary goal of the partnership was to create a new video-on-demand service that would allow customers to access movies and other content directly through Enron’s broadband network. Blockbuster, a prominent video rental company at the time, saw this partnership as an opportunity to expand its reach and adapt to the changing landscape of home entertainment. 

However, several factors contributed to the failure of this strategic partnership. Firstly, Enron, despite its initial promise and reputation as an innovative energy company, was involved in fraudulent activities and accounting scandals. These scandals eventually led to Enron’s bankruptcy in 2001, tarnishing its credibility and trustworthiness as a business partner. 

Additionally, the partnership faced significant technical challenges. Enron’s broadband network, which was a key component of the video-on-demand service, was not fully developed or widely accessible at the time. This limited the potential reach of the service and hindered its ability to compete with other emerging platforms. 

Another example is the partnership between Target and Canada.  In 2013, Target, a major U.S. retail chain, aimed to expand its presence beyond the United States and identified Canada as a lucrative market for growth. Target acquired the leaseholds of over 200 Zellers stores, a Canadian discount retailer, with plans to convert them into Target stores. 

Target faced substantial financial losses due to its unsuccessful Canadian venture. The company reported billions of dollars in losses, primarily stemming from costs associated with opening new stores, supply chain inefficiencies, and markdowns to clear excess inventory. 

In 2015, after just two years of operation, Target announced its decision to exit the Canadian market. The company cited the substantial losses and lack of profitability as the primary reasons for its withdrawal. 


In conclusion, strategic partnerships can make or break a business depending on how they are managed. When done right, they can bring many benefits and help businesses achieve their goals. However, when mismanaged, they can lead to conflicts and ultimately harm both parties involved. 

It’s important for businesses to carefully consider the potential benefits and challenges of a strategic partnership before entering one. And once a partnership is established, it’s crucial to maintain open communication and trust to ensure its success.