The problem with 3) is not just wasted resources or company looking bad to outsiders. It also leads to rampant internal politics as people simply do everything

The problem with 3) is not just wasted resources or company looking bad to outsiders. It also leads to rampant internal politics as people simply do everything in their power to win, or worse, to survive. Just to name a few common tricks: developing features secretly, not sharing resources or technologies, poaching coworkers from other teams, lobbying to get more resources, developing moating features instead of focusing on what users really need, and trading long-term objectives for short-term gains just to get to the so-called "finish line".