| Summary: | The effect of globalization and attracting new market increase the attitude of firms toward foreign market incrementally .This thesis was conducted to introduce a comprehensive framework of internationalization process in Small and Medium-Sized Enterprises in Iran as well as monitoring challenges that firms will face in foreign market operation. Take a glance at the literature of internationalization, Iran`s economic situation and entry modes. The aim of this research was encouraging other studies in the field of internationalization inside and outside of Iran. This subject is still need to flourish and digging out more research. The role of SMEs in developing economic growth need to be consider by the government. In order to achieve objective of this research I have used both quantitative and qualitative research method. Primary data was acquired by a survey through sending of questionnaire to firms in Tehran Stock exchange. These questions were divided into two groups. First group was firms which operate only in domestic market. Second group involved firms which operating both in home market and foreign market through export mode (direct/indirect) or subcontracting. Qualitative researches were applied through interview questions of export companies and try to increase liability and validity of this research. This research had a strong internationalization literature and I strive to be creative and use variety of articles. The result revealed that most important challenge for Iranian small and medium-sized enterprises was political risks, creating by imposing sanctions against Iran. Other problems such as lack of financing support by government, fluctuation of exchange rate, trade policy that enterprises have to overcome through process of internationalization. There is no evidence of government or private organization to boost internationalization of Iranian SMEs export. I suggest based on this research ,the government must establish an organization to support both financially and doing marketing research . I hope this research open a new window for further studies around international marketing environment. Finally I would like to express my sincere appreciation to teachers in Turku University of Applies Scienc at International Business Department specially my supervisor Matti Kuikka
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