INTERNATIONALIZATION PROCEESS OF FIRMS - GUIDELINES FOR CROATIAN SMEs

Small and medium-sized enterprises (SMEs) are the most dynamic part of economy and have a significant impact on the economic development of every country. Growth and development, even survival of a company whose domestic market is small - as it is the case with Croatia, is not possible without internationalization. Basic problems of SMEs are a lack of resources and high perceived risk of doing business abroad due to numerous entry barriers. Limited knowledge regarding doing business abroad and regarding the ways of applying theory in practice, indicates a need for creating simple guidelines that will help SMEs to face the complexity of internationalization and reduce the perceived risk. In this paper, the authors reviewed models of internationalization of enterprises with the aim of developing guidelines to facilitate the internationalization of Croatian SMEs. The theoretical part provides a framework which is the basis of the proposed guidelines for the internationalization of SMEs. The framework includes company’s generic strategies and internationalization, barriers to internationalization, methods of selecting foreign markets, market entry strategies, a discussion on standardization and adaptation, and models of internationalization. The empirical part consists of a case study of a small Croatian company that has an innovative and highly competitive export product and presents the internationalization of that company based on the proposed guidelines. It also provides practical steps to all SMEs having intention to internationalize their operations.