What would your temperament be if one of your direct competitors stood just outside of your office and started promoting their services to people who were coming into your location? I doubt that you would invite them inside for tea and muffins.
That said, how would you feel about competitors who are bidding on the name of your company or your branded keywords in the sponsored results? They may not physically be at your doorstep, but this is worse, as they can man the post 24 x 7 if they so choose.
The fact is that Google AdWords now allows companies to bid on the name and branded keywords of competitors. You can’t actually mention the other company in your ad title or ad copy, but competitors can be visible for searches for your most important keywords.
With this in mind, it’s essential that you devote the resources to both track who (if anyone) is bidding on your branded terms and also devise a strategy to both ensure that you maintain a strong presence on your branded terms and also possibly bid on your competitors. Don’t make the common mistake of complacency. Protect your branded search results by developing branding campaigns so as not be overtaken by your competition.