Business Analysis of Illinois Tool Works

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Illinois Tool Works

ILLINOIS TOOL WORKS

Business Overview

Illinois Tool Works Inc. manufactures and sells industrial products and equipment worldwide. It operates through seven segments: Automotive OEM; Test & Measurement and Electronics; Food Equipment; Polymers & Fluids; Welding; Construction Products; and Specialty Products. The Automotive OEM segment produces plastic and metal components, fasteners, and assemblies for automotive-related applications. The Test & Measurement and Electronics segment provides equipment, consumables, and related software for testing and measuring of materials and structures. This segment also offers equipment and consumables used in the production of electronic subassemblies and microelectronics. The Food Equipment segment provides commercial food processing, warewashing, cooking, and refrigeration equipment; and kitchen exhaust, ventilation, and pollution control systems, as well as related services. The Polymers & Fluids segment produces adhesives, sealants, lubrication and cutting fluids, and fluids and polymers for auto aftermarket maintenance and appearance. The Welding segment produces arc welding equipment, consumables, and accessories; and metal jacketing and other insulation products for various industrial and commercial applications. The Construction Products segment produces engineered fastening systems and solutions. The Specialty Products segment provides beverage packaging equipment and consumables, product coding and marking equipment and consumables, and appliance components and fasteners. The company distributes its products directly to industrial manufacturers, as well as through independent distributors. Illinois Tool Works Inc. was founded in 1912 and is headquartered in Glenview, Illinois.

Illinois Tool Works

Illinois Tool Works


R&P Rank: 204
Sector: Industrial Goods & Services
Industry:Industrial Conglomerates
H.Q Location:Illinois
Website: www.itw.com
Company Address:
155 HARLEM AVENUE, GLENVIEW IL 60025
Ph:847-724-7500

Business Analysis of Illinois Tool Works

The Industrial Goods & Services Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Illinois Tool Works compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Illinois Tool Works to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Illinois Tool Works with an interactive chart.

  1. Revenue Growth: Illinois Tool Works reported a revenue growth of 1.4% year-on-year during 2016. Industrial Conglomerates Industry grew at 3.8% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Illinois Tool Works spent 58.1% of its total revenues on COGS. Industrial Conglomerates industry average (COGS share of revenue) in the same period was 67.0%
  3. R&D share of Revenues: Illinois Tool Works R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Illinois Tool Works spent 17.8% of its total revenues on Sales, Marketing, and General Administration (SG&A). Industrial Conglomerates industry average SG&A spending in the same period was 16.9%
  5. Inventory share of Revenues: As a percentage of revenue, Illinois Tool Works spent 7.9% of its total revenues on Inventories. Industrial Conglomerates industry average Inventory spending in the same period was 14.7%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Illinois Tool Works invested 5.4% of its total revenues on Accounts Payable (A/P) Industrial Conglomerates industry average Accounts Payable investment in the same period was 12.8%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Illinois Tool Works invested 17.3% of its total revenues on Accounts Receivable (A/R). Industrial Conglomerates industry average Accounts Receivable investment in the same period was 25.5%
  8. PP&E share of Revenues: As a percentage of revenue, Illinois Tool Works invested 12.1% of its total revenues on Property, Plants, and Equipments (PP&E). Industrial Conglomerates industry average PPE investment in the same period was 34.0%
  9. Intangibles share of Revenues: As a percentage of revenue, Illinois Tool Works invested 44.3% of its total revenues on Intangibles. Industrial Conglomerates industry average Intangibles investment in the same period was 71.2%
  10. Net Margins: Illinois Tool Works Net Margins in the year 2016 were 15.0%. Industrial Conglomerates industry average Net Margins in the same period were 9.3%

Sector and Industry Association of Illinois Tool Works

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.

Illinois Tool Works is associated with Industrials Sector Group, Industrial Goods & Services Sector, and Industrial Conglomerates Industry.

Industrial Goods & Services sector is comprised of the following industries: Industrial Conglomerates; Industrial Machinery; Electrical Components & Equipment; Electronic Equipment & Parts; Containers & Packaging. The definitions for each of the industries is as follows:

  • Industrial Conglomerates industry includes Industrial companies engaged in three or more classes of business within the Industrial industry that differ substantially from each other.
  • Industrial Machinery industry includes designers, manufacturers, distributors and installers of industrial machinery and factory equipment, such as machine tools, lathes, presses and assembly line equipment. It also includes makers of pollution control equipment, castings, pressings, welded shapes, structural steelwork, compressors, pumps, bearings, elevators and escalators.
  • Electrical Components & Equipment industry consists of manufacturers and distributors of electrical parts for finished products, such as printed circuit boards for radios, televisions and other consumer electronics. It also includes makers of cables, wires, ceramics, transistors, electric adapters, fuel cells and security cameras. Manufacturers of Electric motors and generators and mechanical motion control products are also part of this industry.
  • Electronic Equipment & Parts industry includes companies offering Manufacturing and Design services for Engineered Components and Products used in different industries. Companies providing Laser-based manufacturing products are part of this industry.
  • Containers & Packaging industry includes producers and distributors of cardboard, bags, boxes, cans, drums, bottles, jars and glass used for packaging. Specialty Packaging Products and Pressure-Sensitive Materials producers are also part of this industry.

Industry Ranking of Illinois Tool Works

With $13.6 billion revenues, Illinois Tool Works ranked number 6 of all the companies in the US Industrial Conglomerates industry. There were a total of 10 public companies in the US Industrial Conglomerates industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Industrial Conglomerates industry by revenues during 2016 were:

  1. General Electric ($123.7 billion)
  2. Honeywell International ($39.3 billion)
  3. 3M ($30.1 billion)
  4. Danaher ($16.9 billion)
  5. Icahn Enterprises ($16.3 billion)
  6. Illinois Tool Works ($13.6 billion)
  7. Trinity Industries ($4.6 billion)
  8. Roper Technologies ($3.8 billion)
  9. Carlisle Companies ($3.7 billion)
  10. CSW Industrials ($319.8 million)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Illinois Tool Worksand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of illinois-tool-works

3M (MMM) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

3M Co with $30 billion revenues in the year 2016 was the number 3 Industrial Conglomerates company. Read this report to know the top competitors of 3M and identify growth and cost optimization opportunities of 3M

Danaher (DHR) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

Danaher Corp with $17 billion revenues in the year 2016 was the number 4 Industrial Conglomerates company. Read this report to know the top competitors of Danaher and identify growth and cost optimization opportunities of Danaher

Icahn Enterprises (IEP) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Icahn Enterprises L.P. with $16 billion revenues in the year 2016 was the number 5 Industrial Conglomerates company. Read this report to know the top competitors of Icahn Enterprises and identify growth and cost optimization opportunities of Icahn Enterprises

Trinity Industries (TRN) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Trinity Industries Inc with $5 billion revenues in the year 2016 was the number 7 Industrial Conglomerates company. Read this report to know the top competitors of Trinity Industries and identify growth and cost optimization opportunities of Trinity Industries

Roper Technologies (ROP) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Roper Technologies Inc with $4 billion revenues in the year 2016 was the number 8 Industrial Conglomerates company. Read this report to know the top competitors of Roper Technologies and identify growth and cost optimization opportunities of Roper Technologies

Carlisle Companies (CSL) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Carlisle Companies Inc with $4 billion revenues in the year 2016 was the number 9 Industrial Conglomerates company. Read this report to know the top competitors of Carlisle Companies and identify growth and cost optimization opportunities of Carlisle Companies

Revenues Analysis

Illinois Tool Works (ITW) Revenues And Revenue Growth From 2012 To...

This report provides the last five years revenues and revenue growth of Illinois Tool Works Inc (ITW) from 2012 to 2016. Illinois Tool Works generated a total of $13.6 billion revenues during 2016. Illinois Tool Works reported a revenue growth of 1.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Illinois Tool Works (ITW) Revenues And Revenue Growth From 2002 To...

This report provides the last fifteen years revenues and revenue growth of Illinois Tool Works Inc (ITW) from 2002 to 2016. Illinois Tool Works generated a total of $13.6 billion revenues during 2016. Illinois Tool Works reported a revenue growth of 1.4% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Illinois Tool Works (ITW) Revenue Growth Comparison With Industry Growth From...

This report provides a comparison of Illinois Tool Works Inc (ITW) revenue growth with Industrial Conglomerates industry growth during the last five years from 2012 to 2016. Illinois Tool Works reported a revenue growth of 1.4% year-over-year during 2016. The Industrial Conglomerates industry growth was 3.8% year-over-year during 2016. Illinois Tool Works growth was slower than the industry during 2016.