The main objective of this thesis is to develop a comprehensive proposal for internationalization of a small spin-off pharmaceutical company Adrialab, d.o.o. As such this thesis focuses on three key areas of the internationalization processes for a small and medium sized company (SME): the motivation behind the decision to internationalize, the international market selection and the mode of entry into selected markets. The author has decided on an international literature review approach to establish key concepts in each area, to discuss such concepts in the context of an SME and to identify and implement some of usually descriptive models developed by international management (IM) scholars in order to make recommendations for Adrialab d.o.o. By mimicking the internationalization motives classification used in IM literature, this thesis establishes Adrialabâ s profitability issues with product lines and distribution channels in the domestic market, the spare manufacturing capacity, the companyâ s vision which includes Southeast European (SEE) countries and spin-off nature of the company as reactive and proactive efficiency seeking motives. Subsequently, the author defines the scope of countries to be assessed in the IMS process and develops and foreign market opportunity index ranking those countries on a combination of economic, population and industry macro indicators as well as selected aggregate measures deemed relevant for consumer expenditure categories targeted by the company portfolio. Company policies, resources and capabilities are evaluated in order to determine feasible equity and non-equity based entry modes while an analysis of competitive and distribution dynamics in each country serves to establish most promising consumer segments and desirable types of intermediaries.