Sun Tzu is discussing the importance of choosing a strategic position in battle. He talks of entangled ground – ground that is difficult to maneuver on, such as dense forests or swamps. He is saying that, if the enemy is not prepared for an attack from this type of ground, you may be able to surprise them and defeat them. However, if the enemy is prepared and expecting an attack from that direction, and you fail to defeat them, you will be unable to retreat and will be in a very vulnerable position.
In an entangled market, if the competition is unprepared, you may enter the market and gain an advantage. But if the competition is prepared for your entry and you fail to gain an advantage, then, without the option of easily leaving the market, your business will be in a vulnerable position.
If the competition in the entangled market is unprepared for your entry, you may be able to enter the market and gain an advantage over them. However, if the competition is prepared and expecting your entry, and you fail to gain an advantage, your business may be in a difficult position. This is because, as a result of having significant resources already committed to the market – such as a large quantity of physical inventory already manufactured or purchased, or a large team already working on the market – it may be very difficult for your business to leave the market without incurring significant losses. In this situation, without the option of retreating and re-evaluating your strategy, your business may be stuck in the entangled market and face challenges in competing effectively.