Internationalization of SMEs

Overview:

1. Introduction 2. Motivation for Internationalization of SMEs 3. Strategies for Internationalization of SMEs 4. Risks and Opportunities 5. Internationalization of SMEs – Best approach 6. Conclusion 7. References

Introduction

In Europe companies with less than 10 employees are considered to be micro-firms, those with less than 50 employees are small-firms and those with less than 250 employees are considered as medium-firms. In the US however the size of small firms sums up to 100 employees and medium sized firms may have less than 500 employees.
SMEs are key actors in the world economy because they are an important part of GDP and play a big role for employment. Since today’s world becomes more and more globalized it is important that firms can compete on an international level.
Big enterprises often choose to internationalize their business but for them this process mostly isn’t as risky as for SMEs, because while big firms may lose parts of their firm budget if something goes wrong, SMEs have to fight for their existence and may disappear at all if they choose a wrong approach of internationalizing. Usually small start-up companies do not survive longer than the first 5 years therefore it is very important for SMEs to take the right steps in order to become successful.

Motivations for Internationalization of SMEs

There are different types of motivations for going international. These are proactive and reactive motivations. Proactive motivation is usually why you want to go international while reactive motivation is what pushes you to become international:

|Proactive Motivation |Reactive Motivation |
|Profit advantages