When the size of your target group keeps shrinking, you need to find new ways to grow the business – or improve profits. Steiff, cult German producer of teddy bears, knows how important this is, in a country where birth rates don’t look like they’ll ever return to the high levels of the 1960s.

So what is it doing to grow business (while hopefully cutting costs)?

1) The “market development” strategy – going for new target groups by playing to its cult brand status and getting old people to collect bears

2) The “forward integration” strategy – which in simple terms means moving along the industry value chain and getting into retailing.

If you find yourself in one of Stuttgart’s poshest places, Calwer Straße, you’ll see both of the above merge harmoniously in the Steiff retail outlet. They call it the Steiff Gallerie. Here upmarket teddy lovers can return to the cradle, only this time with lots of money in their pocket, and spend to their heart’s content.