Your opponent will fight back desperately when you don't give a room at all. This is a reason, for instance, to find a way to “save face” ("给面子") in Asia so that an opponent can accept a loss without further conflict or disgrace. The Cold War, fought by the United States and its allies against the Soviet Union and its allies, is the best to illustrate this.
The United States won the Cold War (1945-1990) economically. The Soviet Union collapsed on itself without a direct military attack by the United States and its allies. Economies under the Soviet-style communism couldn't afford to pay for the enormous militaries arrayed against the West. Thus, the Cold War ended and the world stayed whole.
[1] Robert L. Cantrell (2003), Understanding Sun Tzu on The Art of War: "The Oldest Military Treatise in the World", USA, ISBN 0-9722914-0-7
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