Competition can be good. Competition can be healthy. Which begs the question, who do you compete with? Who do you see as your peers? The fellow designers who you greatly respect and whose work you see as comparable to your own. In quality, style, or what type of clients the work is done for. This is important to know as it can help set the bar higher so you keep improving and it keeps you on your toes since you know the work can always go to someone else if you don’t deliver.
When it comes to proposals, competition can be a topic of discussion. Things you may not want to compete with at all are brought up. Maybe it’s Squarespace, or another studio who isn’t in the same space as you, either in what they do or the scope they do it in. In these cases, knowing who you compete with can help you react better to discussions around scope, budgets, processes, and expectations.