The choice of corporate strategy and associated investment decisions determines the future development of dairy farms. These strategic decisions influence the vulnerability to volatile market conditions, both in commodity sales and input purchases. The aim of this thesis is to analyse the stability of dairy farms under volatile market situations. Strategic management offers tools for strategy development, which are applied in the case of a dairy farm. A linear planning model is developed to analyse farm operation strategies with respect to stability of a typical Austrian dairy farm under different market-policy scenarios. The results of the model calculation show, that the modelled dairy farm is rather resilient to price changes. However, there are differences among the farm operation strategies. Specialization and growth strategies provide opportunities to increase family income, but the variability of income is higher when prices are changing. Diversification strategies and part time-farming reduce the volatility of family income due to risk diversification. The main decisive factor for changes in family income is primarily the price of milk sold, especially in specialization strategies. In strategies with a lower proportion of milk sales compared to the total farm revenues or at farms with direct sales, the influence of milk price changes is lower. Changes in input prices have less impact on family-income. Unfavourable price situations can be better managed, when the proportion of calculative costs on production costs is higher. Reserves for future farm investments can be withdrawn for private consumption in unfavourable price situations. However, this option is may be unavailable to farms with high debts. Depending on the farm strategy, different risk management strategies and risk management tools are necessary to stabilize farm income. This thesis analyses options for dairy farms to manage volatile agricultural prices by means of strategic management tools.