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act price-sensitive buyer.' Although right now McDonald's planned to be responsive to changing taste preferences and the growing interest in premium products, 'The company still concentrated on offering a broad variety of products that would appeal to price sensitive customers.' (MARINO, 2005, p. 17). Thompson (2005, p. 125) summarized several scenarios, based on which A low cost provider works best, The ones were well suited the situation of McDonald's were: ' Price competition among rival sellers is especially vigorous' As above analyzed that the price competition in the fast food industry were very vigorous. 'The products of rival sellers are essentially identical'- The fast food products were identical indeed. 'Most buyers use the product in the same ways and Buyers incur low costs in switching their purchase'- which exactly matched the characteristics of the fast food industry in which McDonald's operates. So lower cost generic strategy selected by McDonald's probably the right choice, but it need to be proved in terms of Marketing and financial aspects as below. b. Market indicators The market information provided by the case mainly in below categories. 1. Market Share From the information provided by the case that the marketing share from McDonald's decreased every year since 1998, the amount was not significant though. In 1998 was 35.03% and was 33.26% in 2002, however, even In 2002, its marketing share was well above its major competitors, 13.68 % of burger king and 11.39% of Wendy's. (MARINO, 2005, p. 6). With the turnaround strategy implemented in 2003, By January 1, 2004, McDonald's had enjoyed 11 straight months of sales gains, with double-digit gains. (MARINO, 2005, p. 16). 2. Systemwide Outlets Another indicators of marketing information will be the number of outlets, In 2002, The total outlets of McDonald's World Wide was 31,108 and operated in 120 countries, both figures are almost triple than its major competitors. (MARINO, 2005, p. 8). From the above 2 figures, there is less doubt that McDonald's had strong market performance in both domestic and international markets, it is hard to say that its strategy did not work. Financial indicators To evaluate the financial performance of McDonald's, some important financial ratios had to be examined, 'A guide to Case analysis' divided those ratios into Profitability ratios, Liquidity ratios, Leverage ratios and activity ratios. Based on the financial report provided by Marino, 2005 (pp. 19-22), this article illustrated those important ratios from different categories as below: 1. Profitability ratios: Ratio Q3 2003 Q2 2003 Q1 2003 2002 2001 2000 1999 1998 Return on sales 21% 19% 18% 14% 18% 23% 25% 22% Net Profit margin 13% 11% 10% 6% 11% 14% 15% 12% Return on total assets 2% 2% 1% 4% 7% 9% 9% 8% Return on stockholders' 5% 4% 3% 10% 17% 21% 20% 16% Earning per share 0.45 0.37 0.29 0.77 1.25 1.46 1.39 1.10 From above profitability ratios, we can learn that: a) The company did experience turnaround since Q1 2003, all the important ratios start to recovery, it should be close related to the turnaround strategy implemented by James Cantalupo in January 2003. So the new strategy did work. b) Although the return on sales is close to that level in 1998, and the net profit margin in Q3 of 2003 even higher than that of 1998, The return on total assets level is much lower than that of 1998, 2%