It's a gross simplification of how it normally works in biological systems as well. Not that often that a totally dominant species that occupies the exact same niche appears. If it is a closely related species, if there aren't strict barriers to gene flow (i.e. they can reproduce) the species will just combine and those beneficial characters may or may not get swamped. If the second dominant species doesn't completely occupy the niche, the original is likely to just shift and specialise in a different part of niche - different food, shift in habitat, etc.