Given the changes in the external environment mentioned in the stimulus, research and development (R&D) enabled Fujifilm to develop highly innovative and differentiated products and to have a first mover advantage in many segments and markets. There is evidence that Astalift, as an example became one of the best selling brands in Japan. R&D allowed Fujifilm to explore these options before bringing them to the market place as new innovations. Hence the risk of failure was much reduced. R&D would also be helpful with the appropriate decision on the marketing mix of the new innovations. Moreover, the process of granting a patent after R&D has been carried out also involves costs for the organization. The granting of a patent can possibly enable Fujifilm to charge a premium price that is likely to satisfy the shareholders if they are concerned about increasing costs of R&D. However, the process of R&D, as well as ensuring a patent for Fujifilm and other pharmaceutical or high technology industries is particularly expensive and timeconsuming. Without granting a patent, these costs may not be recouped. Apart from the direct costs of R&D we must also note the opportunity costs to Fujifilm. Research in itself is no guarantee of commercial success. Would these funds for R&D be better spent on supporting other products in the