There is a marked difference between paying attention to your competitors, especially when it comes to how they market themselves, and focusing more on what they are doing, than what your customers might want/enjoy. Competitor obsession can distract you from more important things. Paying attention to businesses similar to yours can be good for inspiration, but it’s still important to ultimately focus on giving your customers the best experience possible.
It can be particularly damaging to focus on specific competitors. Paying attention to patterns in marketing and brand success can be wise. Taking things to the point where you’re essentially cloning what someone else is doing can be extremely problematic.
At the end of the day, getting feedback from clients is always a better idea for making changes, if those changes are necessary. And while identifying certain patterns can steer your own design and branding goals in the right direction, you still want to ultimately establish your own unique identity.