Makeup Limited manufactures and sells beauty products. The company has operated a strategy of product differentiation for the last two decades, providing high quality products and thus extracting a price premium from the market. However, global events of the last 14 months have seen its customer base diminish, and a crucial decision to move strategically to a cost leadership strategy, that is, to try to sell more products at a lower price.

Required

1. Describe the implications of this change in strategy for Makeup Limiteds expenditure cycle.
2. Discuss what changes could be expected to the process of choosing suppliers AND the associated risks given this strategy change.