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Guanxi is about networking and reciprocity, Sopranzetti said. "It's not about shallow things," he said, explaining that guanxi is based more on deep trust and understanding.

"That [guanxi] doesn't translate very well."

Sopranzetti added some firms also fail to take cultural differences into account and don't do adequate market research. He pointed to an example of two beer companies ¡ª Budweiser and Miller Brewing Co.

From its consumer research, Budweiser learned that most Chinese drink premium beer when they eat out. They further learned that because of cultural norms, Chinese are accustomed to drink from larger bottles and share beer during meals. As a result, Budweiser began to ship larger bottles to China.

"Miller's bottles were too small," Sopranzetti said, explaining why Miller failed to do as well in the market.

"Firms really need to understand the consumer environment. They need to do their research."

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