The idea is to fill a need that everyone else is ignoring, or, in Sun Tzu terms, occupy a position that others have overlooked. All real success stories come from this approach.
Google filled the need for a better Internet search engine. Youtube filled the need for the ability to post videos for streaming. Amazon filled the need for Web shopping.
All of these companies explore new territory, where no one had established a strong position. They didn't fight for existing positions. They created new ones. Google wasn't Yahoo. Youtube wasn't Pixelon.com. Amazon was the most focused and unique from the start: an on-line bookstore.
In competition, we can try to take away existing positions or we can create new ones.
In the first case, we must meet our enemies to subdue them. Netscape saw the Microsoft was coming after them, but chose to battle instead of using their existing position to strike out for uncontested territory that Microsoft could not follow.
If we choose to grow in uncontested territory, we can subdue our competition, that is, surpass them, without fighting with them directly. We can develop a position that no one wants to challenge and others want to join.