Internal competition on the same project shows a lack of confidence from management... it literally shows they don't know what to do, and are just throwing spaghetti at the wall, or aren't confident in their skills to get something deployed with what they choose. It's not solid leadership, it's dissonant.
It also sets people against each other, creates better-than-you mental heirarchies between equal workers where non are necessary, and is essentially friendly fire in the workplace. I've never seen this end well.
Capitalism isn't just economic natural selection either, it favors those with capital, and especially the most of it, and is easily exploitable by them to tip the playing field in their favor against their competition and those below them. Your analogy is bad in both cases; natural selection means one side dies, which is not what's being described here, and is not good for one side anyway, and capitalism is not as good as cooperation anyway. The latter is far more efficient.