Two different species occupy the same habitat. The two species will not compete with each other for food, shelter, space and water when there is a separation of their niches. A niche is a part of the habitat where a species makes its living. An example will be of the fishes and the crabs that live in a small lake. They both have the same habitat, lake, but make their living in different parts of the lake. Fishes swim in the water, while the crabs are bottom dwellers that feed on the small insects that live there.