Aldi has been crushing the competition for years and makes an excellent case of how organizational alignment can deliver a strategic advantage (cost in this case). Here is the version of the case for Madison Wisconsin but it would be easy to customize to almost any location since Aldi has spread far and wide. I divide the students into groups reflecting segments of the market (Whole Foods/Kroger/Wal-Mart/Stop-n-go, etc.) and have them assess the competitive threat as Aldi expands in their market. The Whole Foods group typically concludes that there is no threat. However, the threat becomes more apparent once the other rivals decide to add services since they can’t compete with Aldi’s prices. This Bloomberg article shows that Aldi has been a much more direct threat to Whole foods. Ultimately, none of the rivals can duplicate Aldi’s cost structure because their assets are not aligned toward that strategy. Here are a few very funny ads demonstrating the simple principle — why pay more than you have to?
To see a few more Aldi commercials, Continue reading
This cooking competition show begins with an auction of resources needed to cook including space to work and cooking utensils. The contestants bid to preempt rivals by obtaining access to key resources while saddling them with inferior resources. This is ultimately quite similar to the 
Most students quickly grasp the concept of game theory–figuring out what your opponent is likely to do helps you decide what you ought to do. As this clip shows, however, failing to understand the real decision choices to be made can lead to deadly, but funny results. In class, after introducing simultaneous vs. sequential games, I show the clip, pausing it just before the 2:11 mark. At this point the poison is in the goblet, and I ask the students who haven’t seen the movie which goblet they think is poisoned. I record answers, and then show the clip (up to anywhere between 4:45 and 5:02). I then ask if they were surprised. I then show the remainder of the clip, and we discuss what mistake Vazinni made. Students see the real payoff matrix as: a) if I (Vazinni) guess wrong, I’m dead; b) If I guess right, then the Dread Pirate Roberts knows it too has incentive to kill me before he dies. I only live if Iocane powder kills instantly. My correct answer can only be not to drink either goblet if I want to live. After watching this video clip and class discussion, students can:
Managing change is given little time in most strategy courses. We often understate how difficult strategic change actually is and then wonder why organizations struggle so much with implementation (and our students think its all common sense). You can think of it as walking blindfolded on a tightrope between two solid foundations. During the transition, there is great uncertainty about whether the desired path is attainable. This, of course, is another way of looking at Lewin’s unfreeze/change/refreeze model. This video can help to illustrate the issue:
Differentiation can be a challenge if existing products have identified the most central value propositions for customers. Increasingly, firms must differentiate using paths that may not follow others and there may be good reasons that rivals have left the path uncharted. Here is an example of differentiation whose time may not have come…
Nonsubstitutability is a critical resource attribute for sustaining a competitive advantage. Otherwise, a rival may find a different resource that can nullify an advantage without actually imitating the focal firm’s resource or capability. An example might be Apple’s iPhone patent for the “screen bounce” when the user scrolls to the bottom of a page or list. Early Android phones had the same feature but, more recent phones, 
Mattel just lost to Hasbro on producing Disney princess dolls — a $500M a year business. This brings to an end a 60+ year strategic alliance. 
