Competition leads to:
Interspecific competition can favor reduced overlap in resource use. Over ecological time, individuals may alter behavior or habitat use, producing niche differentiation or ecological compression. Over evolutionary time, selection can drive character displacement: heritable traits diverge because phenotypes using less-contested resources achieve higher fitness. Both outcomes weaken direct competition and can promote coexistence. Competition does not inherently create mutualism, and it need not eliminate both species. Competitive exclusion may remove one species if requirements remain too similar and no stabilizing trade-off exists, but differentiation provides an alternative outcome. Nor does competition generally increase niche overlap; greater overlap raises the intensity of competition for limiting resources. The predicted response depends on genetic variation, resource diversity, environmental heterogeneity, and relative fitness. Evidence for character displacement requires greater trait divergence in sympatry than in allopatry and a demonstrated connection between traits and competitive resource use. Thus competition acts as a selective and ecological pressure that can separate niches, rather than guaranteeing a single fixed community outcome.
Ref: Ecology: Concepts and Applications, Molles, 9th Ed., Ch. 13