There is a fine line between understanding what your competitors are about and obsessing about how they are doing things you are not.
There is a fine line between paranoia about losing market share and actually going out and creating it.
I firmly believe the answer to this lies in knowing your competitor and its products and objectively (granted that’s the hard part) evaluating them. Once you understand the lie of the land, get on with what you do best. Innovation and unique offerings set you apart from the rest of the pack. No one will ever have the same idea you do, and even if they have a similar one you will both do it very differently in execution.
If your aim is to be 3rd or 4th behind your competitors then imitation, borrowing and allowing others to innovate is perfectly fine; but I do feel to get ahead you have to not truly worry about the rest of the pack. If you are feeling you are losing ground, stop and see what is the major factor for the loss and then apply yourself to it and find a version of that, that works for your business.
But if all you are doing is trying to get ahead by assessing your competitors and obsessing or deriding their products without understanding the benefits of those products to their customers then you will be losing out.
As humans we spend too much time worrying about what everyone else is doing. Be aware but don’t be obsessed and miss out on the cool stuff you could be doing.