Karo Healthcare’s vision is to become a pan-European leader in everyday healthcare
Our vision is ambitious. We want to build a highly profitable, fast-growing, pan-European consumer healthcare company with distinctive brands and strong category positions.
We aim to grow our top line 2-3 times in the next few years fuelled by M&A.
We are a people company, and we’ll continue to be one. We want to provide a platform and an opportunity for our people to create something meaningful and bigger than the individual: To deliver smart choices that give people control over their everyday health.
Working to realise
Ambitious goals need a strong foundation, and we have already laid the groundwork to make our vision a reality. From 2019 to 2020 we grew more than 3% organically. That is higher than comparable healthcare market indices in our markets.
From our strong Nordic core, we have expanded our business geographically through M&A – within and beyond Europe. We have consolidated our brand portfolio, and our top 10 brands now account for more than 70% of our revenues.
All in all, the state of Karo Healthcare today gives us a solid launch pad to become a pan-European leader in everyday healthcare.
Our strategy is to help shape the future within everyday healthcare and respond intelligently to changes in the environment around us. To guide our actions, we have made important strategic choices regarding ‘where to play’ and ‘how to win’.
Our strategic choices about ‘where to play’ define which categories and markets we want to compete in. ‘How to win’ demonstrates how we outperform the competition in our markets of choice.
Where to play:
Everyday healthcare and seven
We aim to gradually increase the consumer healthcare share of our business and our future M&A activities will focus on this space. We will, however, continue to be proud owners of a growing portfolio of prescription drugs that generate cash flow and support our growth investments.
Our commitment to everyday healthcare also means that we will focus on pharmacy and retail channels with a business-to-business-to-consumer (B2B2C) model alongside building a direct-to-consumer business on e-commerce platforms.
Based on our current brand portfolio, we serve six categories within everyday healthcare:
01 Intimate health
02 Digestive health
03 Skin health
04 Foot health
05 Pain, cough and cold
07 Speciality products
We believe there’s great potential in treatments within what we call ‘health-minus’ categories. This term covers categories associated with discomfort, embarrassment, and stigma, which cause them to remain under-treated.
Examples include intimate and digestive health issues. Left untreated, health-minus ailments can have a substantial negative impact on quality of life. With awareness building and providing online treatment opportunities, we aim to remove physical and psychological barriers to getting the necessary treatment.
How to win:
At Karo we have three key enablers for
competing and winning in our markets
01 Our operating model
02 A scalable platform
03 Our circles of excellence
An operating model with clear priorities
and high value creation
We have a clear operating model that defines what role we play in the everyday healthcare value chain by focusing on three areas:
House of brands – We own and commercialise original product brands that are quality assured, endorsed by healthcare professionals and trusted by consumers.
Virtual company – We are a virtual company that builds partnerships for access to research and production. That’s how we reduce complexity, stay agile, and drive our brands’ profit and growth.
Commercial healthcare company – We grow our brands and make them available and accessible to consumers across channels – from our Nordic core and beyond.
A scalable platform to grow from
The scalable platform is our way of securing that Karo is efficient and delivers profitable growth as the business increases in scale and scope. The scalable platform has a ‘hard’ and a ‘soft’ side.
The hard side includes the systems and applications we put in place to manage our business and the design of clear, data-infused core business processes. We’ve built a highly digitised company from insights and driven by facts, mimicking a born-digital company, in which data and intelligent process design take centre stage and guide decision-making, reducing perceived complexity.
The soft side covers the culture and values which drive our strategy execution and transform strategic choices into reality.
Circles of excellence enabling strategy execution
Several capabilities are required to reach our vision and execute our strategy. There are four areas where Karo must be distinctive stand out. We call these the ‘Karo circles of excellence’.
• Portfolio management – basing everything we do on market insights
and trends, focusing resources on the brands with most potential, and
keeping complexity in check.
• Strong commercial disciplines – understanding how consumers make
decisions, picking the right channels to reach them and being willing
to test our assumptions.
• Supply chain and integrated business management – continuously
looking for profitability and value from working capital, and sharp
forecasting to tighten performance and curb waste.
• M&A execution and integration – following a strategy that flows from
our purpose and vision, an approach that cultivates the right targets,
a vision for how they help us reach our objectives and discipline to
execute deals and integrate efficiently.
On the next level, we need to execute well with each channel partner and be able to impact them to our advantage. Such commercial excellence disciplines include optimising the efficacy of our advertising and promotion spend and securing strong in-store execution. Finally, it concerns our ability to effectively manage pricing.
For all channels, managing the consumer journey and its key touchpoints is critical. Our ability to execute effectively rests on the ability to track and optimise performance. We need to test our assumptions continuously, and we need to learn and adapt. It is okay to test and fail as long as we measure our impact and revise the approach if needed.