Small market teams have to draft well, and or make good trades in order to remain competive.
Look at the A's. They took compensation picks and ended up with the likes of Huston Street, Nick Swisher, and Joe Blanton.
The big three of Hudson, Mulder, and Zito were draft picks for Oakland in '97, '98 and '99. Two of those pitchers left but in return the A's received Juan Cruz, Dan Meyer, Danny Haren, and Daric Barton. Barton by all accounts one of the best hitting prospects in the game.