'Her company is outperforming those of her competitors'

Solution 1:

Yet another instance of the GMAT making up the rules of grammar as it goes along, without any reference to what actually happens in the language...

Never mind. The idea is that those somehow stands in for the antecedent word company. It is assumed, therefore, that in order to be grammatical, it must be the same in grammatical number as the antecedent. The antecedent noun company in this instance is singular, the pronoun both is plural, and so this sentence is deemed ungrammatical.

This of course is poppycock. We can always use the words that and those without a following noun so long as the listener can easily identify what (things, not words) they refer to. If you enter "is greater than those of" into a search engine such as Google, you will get about 530 million hits. Enter "is lesser than those of", and you will get another 495 million. In other words you can easily generate over a billion hits using a couple of basic examples, showing this anecdotal 'rule of grammar' to be an outright lie.

Don't let this put you off the GMAT. It is perfectly possible - and very good fun - to try and spot which ridiculous fake rule they are trying to exemplify this time. Good luck!