At the same time, they give enough room for their competitors to register a domain name similar to the original one with a different TLD, say, with .net domain name.

Now, the risk arises when your competitors may use that second domain name to either show-case their own products and services or they may use it in such a way that ultimately will give your brand or business name a bad reputation among the customers. In either case you will be loosing valuable customers.
You may ask the question:- Why should I register more than one domain name?

If you're thinking about registering more than one domain name, you've got the right idea. Registering and using multiple domains names is great for building your business and can help you create a dynamic online identity.

When you register multiple domain names, you can:-

Keep your competition from registering a domain name that draws customers to them instead of you.

Promote the different products and services you offer.

Drive more traffic to your Web site.

Enjoy more opportunities to market to--and be listed in--search engines.

Create distinct advertising strategies that reach different target markets.

Provide customers more ways to find you when searching the Internet.

Capture common misspellings of your domain name, instead of sending visitors to an error page.

Protect your brand and online identity from those who may have unsavory purposes.

Registering multiple domain names with .com, .net, .org, .info, .name and .mobi TLD's is always must. It's also cheap. Many domain name registrar’s like NxtDomains.com provides on-spot discount when you register multiple domain names. You may save up to 23% on domain prices per year.

Thus registering multiple domain names is always an advantage to your business and will always secure your brand name.