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Ranking #1 in Google, however, means nothing... Ranking #1 for keyword phrases that are popular and that actually convert is much more important. It could be that they are ranking for the wrong keywords...
If they are ranking #1 for competitive keyword phrases with lots of search volume and that do convert, it's not likely you'll over take him any time soon... but it's possible... eventually.
I would concentrate on creating individual pages for each major keyword phrase you're targeting... then do on-page and on-site optimization for those pages. Make sure that all internal links to those pages use the targeted keyword phrase(s) as the link text. Then work on building external links... It's the external link building that will make the most difference in the long run.
Hard to answer random, vague questions like this one.
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