The character arc is fairly simple.
The character is morally deficient in some way, is “needful”, that is, needs something that will fill the gap. The character may well be unaware of his/her lack, or desperate to hide it.
The character WANTS something. This goal is not the same as his/her need. In fact the real story lies in the friction between what the character WANTS and what, for the purposes of growth, happiness, equilibrium etc, he/she NEEDS to fill his/her deficiency.
Between the Character and what he/she wants is the obstacle. If there was no obstacle, there is no story. In simple terms the obstacle is the opponent and on the bald face of it defeating the opponent and gaining the object of the hero/heroine's desire is the end of the story.
It's not so simple.
Because the goal and the need are different, it is possible (nay, probable, in a properly constructed story) that obtaining the goal is the WORST POSSIBLE outcome for the character, morally. His/her heart's desire will be his/her undoing...or rather, his/her moral flaw will undo him/her if he/she hasn't filled the moral hole at his/her core, and obtaining what he/she wants without obtaining what he/she NEEDS is, from a story point of view, fatal. Consider Citizen Cane, for instance.
Very often, in the pursuit of the hero or heroine's heart's desire, the moral compass is lost and the “good guy” starts to behave like the “bad guy”. Pretty soon James Bond is impossible to distinguish from SMERSH, and you get Smiley vs Karla instead.
Another way to look at it is that the story is the universe testing the character flaw to destruction. Change or die, if not actually, then certainly metaphorically. Stories are all extended metaphors designed to explore one aspect of the human condition.
Anyway, the character arc.
So we have our hero or heroine wanting something but encountering an obstacle. So now he/she needs a plan. He/she needs to act. And as the universe in the form of his/her opponent reacts, we have the struggle. The plan and then the battle. The war, even.
And at some stage the hero or heroine has to realise the truth about him/herself. The central, undeniable, black and unpalatable truth.
Then it is time for that last moral decision. It comes down to this:
Gain your heart's desire. Win. Achieve your goal...but sell your soul to do it;
Give up the thing you have hungered for, turn your back on it, and retain/regain your self respect.
Quite often the hero or heroine giving up what they want leads to actually gaining it, if not in exactly the form he or she imagined it.