How to be a good SEO optimizer while competing with a good ranked Bad SEO optimizer?

[MiddleEastSeo]

1. My keywords are very competitive. My on page optimization report gives A grade for all the keywords I want to target to my Root domain. But my root domain does not show up on search engines for those same keywords. So thanks to SEOmoz i have managed to understand  the place I lack is good link building. My competitors have done lot of link building through spamming, commenting on blogs, directories etc.

Now according to good seo, this is not right. What do i do?

2. I get digging more in it, i realized that i am getting traffic mostly for less globally searched keywords. But my competitors get high traffic from well searched keywords. How do i cope with such competition?

Thanks

[Sean_Dawes]

Crank out some good content and link back with varied anchor text using some of those higher search volume terms. Also try and generate good content on other websites (guest blogging, providing a resource section on some site) and leverage varied anchor text back to your pages you are trying to rank.