Many students assume that low wages are a necessary component of a low cost strategy. 
However, the many of our best examples of cost advantages pay their employers higher wages. In groceries, Aldi comes to mind – they chased Wal-Mart out of Germany because Wal-Mart couldn’t match their prices. Wayne Cascio writes about Costco’s advantage over Sam’s Club. Samsung is another very nice case of this as their low cost advantage is linked to higher productivity obtained from high wage workers. This insulates them for a time from the threat of Chinese competition which relies initially on low wage workers. The only way for them to catch up was to invest in human capital (see the Samsung Electronics case).
Contributed by Aya Chacar
, it has also sought to close the service gap with local rival All Nippon Airways – putting in new seats, revamping in-flight menus and installing electronic toilet seats in some business and first class cabins. That investment underscores JAL’s belief that customers will pay a premium for full-service flights.” You can also find a 
The essence of this exercise is simple. Teams must build a device that will catch an egg dropped from 25 feet (e.g., a stairwell). The trick is that they must build it from items purchased in an auction. As such, items that are easy to use (e.g., an old pillow) are very expensive while items that are hard to imagine a use for (a brick) are cheap. Profit is determined by 1) succeeding in the task of catching an egg and 2) having the lowest cost function. As such, this demonstrates Barney’s (1986) notion of superior expectations in strategic factor markets.
Carpenter Strategy Toolbox 