C.B.
There is nothing wrong with compitition- in fact I think it is very healthy. I think you should encourage your son but also teach him the importance of being a gracious winner and a gracious loser. That being said, his two friends don't sound like very good friends to me. Any friend who is condesending or ridiculing is not a friend worth having. I would explain to him that how his friends treat him is not right and that is not how we treat anyone, especially those we call our friends.
My daughter(now 7) had a couple of girl friends who were very rude. If they wanted something she had they would tell her they no longer were her friends until she gave them what they wanted. My son also had a friend who was very rude when over at our house. He was very rude to my younger children- he was no longer allowed over at our house after that. We did the same with my daughters friends. They now have some really great friends.
Teaching your child that everyone wins is setting him up for disapointment in the long run. Teaching him to try his best no matter what I think is more important. I don't mean to offend, there are deffinatly people who take compitition too seriously and I see why you shy away from it, but you also hold him back from really shining if he is afraid to do better than anyone else.
Good luck!
~C.