Master Funakoshi felt that "a real master can win without fighting." You won't find many stories about his famous fights because he was ashamed of them. (Contrast this to Choki Motobu, who liked to beat people up and boasted about it.)
I've had three experiences along this line, and have "won without fighting" at least twice. Those experiences were rather dramatic, but ended with surprising and sincere overtures of friendship from the potential opponents. I have spent a lot of time meditating on how this was accomplished.
Recently I had an experience that would never make the front pages, but seemed pertinent to this discussion. I was in Houston, Texas, without a car on a Sunday night, looking for someplace--- anyplace--- to get something to eat. I was on foot at 10 pm in a hot, humid city. The streets were almost deserted. Houston rolls up the sidewalks on Sundays. Everybody stays home.
At this point I was approached by a homeless man, who came out of the darkness like a ghost. He quietly asked if I could spare him some change. He said anything I could give him would make a real difference.
I fumbled for my change but realized that I had an opportunity here. "I bet you know where all the local restaurants are," I said. "Everything seems to be closed. Where would you go if you wanted a sandwich at this time on a Sunday night?"
He looked startled, and then thoughtful. He gave me the lowdown on all the restaurants within a five-block radius, ending by pointing out a Subway just down the block. "That one is always open," he said. "Twenty-four seven."
I thanked him and gave him a $5 bill. He was very pleased.
As I turned toward the Subway, he suddenly called after me. "Sir! The best deals are in the Presbyterian Hospital cafeteria!" he said, pointing across the street. "Hospital cafeterias are always open!" I told him I'd remember that. It's a good travel tip.
I shared this story with several friends on the Internet. One praised me for treating the street person like a human being and giving him a way to "earn" the five dollars. Most people would have shaken him off quickly, he said. Another replied that it was easier for me to do that than for most people, because I wasn't afraid of being mugged.
Well, that's true, I thought. There was just one man, and I could see his hands. No danger there. It never crossed my mind to be afraid of him.
That's what makes this casual story pertinent to the legendary question of "winning without fighting." You create that victory by not being frightened. A martial artist can face a threat calmly, and that calmness is unnerving to the aggressor. He panics and flees. I've seen it. That is how you win without fighting.
Funakoshi had two fights that I know of. In one he struck a man who ran directly at him out of the darkness, with no time for eye-to-eye contact or negotiation. There was no opportunity for a contest of spirits. I don't see any dishonor there.
In the other, Funakoshi allegedly interrupted a beating and invited the three drunken attackers to "pick on someone their own size." (I hope you see the humor in that.) Funakoshi hoped to intimidate them with his masterly presence, but the thugs had other ideas and attacked him. He was forced to do a demonstration of real-life tai sabaki. The thugs tried to punch him but could not land a blow. After several unsuccessful attempts to hit him, the thugs got the message and backed away. Funakoshi didn't exactly "win without fighting," but he won without striking his enemies. I'd call that a moral victory.
"Winning without fighting" isn't the same thing as "avoiding the fight." It is facing down the challenger and forcing him to withdraw the challenge. This doesn't happen in the ring, but it is not uncommon on the street. There are legends about it.
Strive for it.