The internationalization of small and medium enterprises is recognized as an important precondition for growth and development, especially in small economies, such as Croatian. Growing businesses enable new employment, they are innovative and competitive. In order to internationalize, small and medium enterprises have to be aware of the opportunities and risks in foreign markets, and to recognize the factors that play a role in the internationalization process as well as possible patterns of internationalization. The main aim of this doctoral dissertation is to explore the internationalization process of small and medium enterprises as a growth strategy and to analyze the prerequisites for successful implementation. In order to answer the research questions raised, this dissertation uses methods of quantitative and qualitative research. A secondary database Eurobarometer with the topic of Internationalization of Small and Medium Enterprises is used in quantitative research. Results are used as the basis for selecting the sample for qualitative research and for preparing a questionnaire for conducting semi-structured interviews. In the second part of the research, understanding of this research problem is deepened through case analysis. The focus is on the manufacturing industry in Croatia, and the research seeks to understand the prerequisites, challenges and patterns of internationalization of small and medium enterprises. The final part of the dissertation provides recommendations for small and medium enterprises and policy recommendations, as well as recommendations for future research.