Lateral movement allows an attacker to pivot all attacks through a compromised machine to other subnets within an organization. Let's imagine you're conducting a penetration test on a client's network. Their organization contains multiple subnets but they haven't informed you about the number of networks that actually exist. So, you start to scan the network to look for live hosts and vulnerabilities, and to discover the topology.
You've discovered and mapped the entire 10.10.10.0/24 network and you begin to exploit as many machines as possible. However, during your exploitation phase, you notice something interesting on a particular victim machine, and, on the Meterpreter shell, you execute the ipconfig command to ...