With information problems mitigated, eBay has gone from strength to strength. It currently has 100 million active users.13 The feedback system has remained eBay’s core risk assessment tool. It has since been emulated by other web-based marketplaces, such as Etsy and Amazon. Each uses the information embedded in the web, conveyed in a common language, to squeeze even the largest of lemons. (b)  Improving risk management across firms  The potential to improve resilience through a common language is, if anything, greater still when managing risks across the network. Take Wal-Mart. It is connected to all of its suppliers through a central inventory management network, giving suppliers full visibility of product inventories at Wal-Mart stores. Indeed, Wal-Mart requires that its suppliers use this network information to manage the frequency, timing and quantity of their product shipments to its stores. This is known as the continuous replenishment process.14 The level of supply chain visibility in this system has enabled suppliers to fine-tune their responses to shifts in demand. This reduces the risk of being out of stock. It also reduces instabilities which otherwise arise along the supply chain between manufacturers, wholesalers and retailers. For example, it is well-known that small shifts in demand tend to get magnified as they move along the supply chain. This phenomenon is known as the “bull-whip effect”.15 The longer are supply chain lead-times, and the greater inventory uncertainties, the more destabilising are these bull-whip oscillations. Wal-Mart’s continuous replenishment process has compressed dramatically those lead times and uncertainties.
Nevertheless, currently the Albanian economy is being influenced by second round effects that have affected the advanced economies of the world. In general, first effects of the financial crisis outburst in American, Asian and European markets were: tightening of lending terms, reduced liquidity and decreased value of the national wealth of those economies. These phenomena triggered less consumption and investments, and eventually led to overall economic slowdown of all those regions. Such developments have also affected the developing economies, since globalization process has turned them into factories of large economies. In consequence, this phenomenon has triggered the spread of crisis effects even in the developing economies. Naturally, reduced demand has caused overall decreased investments of developed economies in traditional exporting markets. Currently, capital flows that have financed high current deficits, particularly into transition economies of the Central and Eastern Europe, are interrupted. Furthermore, financial and manufacturing companies, as well as households from advanced economies, being faced with financial difficulties, are exercising pressures to withdraw their funds from the developing economies. All these developments have shaken the macroeconomic equilibrium of the developing economies, which are experiencing current deficit deepening and strong pressures on their currencies. This contagion mechanism, through which the crisis ignited in most advanced economies of the world is spreading worldwide, has made Albanian economy feel the effects. Even though the financial system was not influenced by the world financial crisis, second-round effects are being reflected and will be reflected even in the future.