Steering through tough times? Insights into strategic change processes of small firms in the context of demographic challenges

Market transformations induced by demographic change challenge the strategy-formation of small firms because they are complex, hard to predict and slowly evolving. Demographic change therefore represents a context of market crisis and turbulences, requiring the adaptation of business strategies. This article explores the strategic change processes of small firms in Germany in the light of demographic change particularly with regard to changing regional sales markets. Conceptually, it is informed by various perspectives on the strategy-formation and strategic adaptation of small firms in dynamically changing environments. Empirically, a mixed-method approach with qualitative case study and descriptive data analysis is used, which covers firms in different German regions affected by demographic change. The findings suggest that market leadership and market expansion are the most important adaptive business strategies. Gradual divestment as a partial market exit strategy is typically not chosen, and, if so, embedded in a local business networking strategy.