You shouldn't worry about the competition, but knowing their strengths and weaknesses can give you an advantage.
"Don't worry about the competition - worry about your own business" has become something of a piece of folk-wisdom. The idea is that if you focus too much on your competitors, you'll neglect your own business - and that copying your competitors reduces the differentiators which make your company unique.
However, there's a lot to be said for a bit of competitive analysis. Understanding where the competition is strong or weak allows you to work out ways of making the most of your own strengths.
For example, look at your competitor's pricing structure. Would they be vulnerable to lower prices in certain areas? Or are their prices so low that they may be producing lower-quality products?
So don't worry about the competition - but study them well enough to know their weaknesses, and whether you can exploit any of them.