Analysis of Illinois Tool Works
by Ray Prendergast
July 6, 2010
ITW’s Challenges and Opportunities
Illinois Tool Works (NYSE: ITW) is a leading international business corporation with nearly 100 years of history. A diversified manufacturer of advanced industrial technology, Illinois Tool Works (ITW) designs and produces an array of highly engineered fasteners and components, equipment and consumable systems, and specialty products and equipment for customers around the world.
ITW currently has 825 decentralized business units located in 52 countries and employs approximately 60,000 men and women. Headquartered in Glenview, Illinois, ITW is organized into eight divisions: Transportation; Industrial Packaging; Food Equipment; Power Systems & Electronics; Construction Products; Polymers & Fluids; Decorative Surfaces; and All Other.
ITW is known as an innovator, holding over 3,800 unexpired patents with 1,700 patents pending. ITW follows a business strategy that includes “decentralization” as one of its guiding principles. With a large number of small and diverse companies, ITW aims for customer intimacy and a niche as a high-valued added supplier to other manufacturers.
As a manufacturer, ITW faces the problems all manufacturers face – intense global competition, increased environmental regulations and requirements, rapid technological change and the need to constantly upgrade machinery and workers’ skills, and decreased availability of capital. However, as a highly diversified manufacturer, ITW is in a strong position to weather the economic downturn.
ITW aggressively pursues new markets and new opportunities. For example, ITW’s Polymers and Fluids division has recently established a customer base in the rapidly growing Wind Turbine manufacturing. Many other manufacturers, especially ones that are closely tied to Transportation, are trying very hard to break into wind energy. ITW has successfully entered this supply chain...