One of the most horrendous things to happen to kids since the advent of day care is the way the concept of winning is now taught in schools. Schools today teach children that everybody is entitled to something simply by showing up. They're also slowly taking away honors and awards and eliminating Valedictorians because they don't want anybody's feelings to get hurt.
It's a cuddly notion to want everyone to feel like a winner, but in my opinion, it has contributed to an entire generation of young people who can't deal with reality. In reality, the world is a very competitive place. We've become so worried about kids getting their feelings hurt that we don't teach them how to recognize or actually deal with their feelings.
Paradoxically, kids also receive the message that winning is everything. Like the Vince Lombardi quote, "Winning isn't everything; it's the only thing," our society tells kids that winning is the be-all, end-all. As a result, kids cheat in order to win, and when they lose, they learn to hate or be cruel to the winners.
Even without our "help," kids already have particularly powerful emotions about winning. They don't want to win - they need to win. Oftentimes, they are not even content with winning, or they feel a need to engage in expressions of gleeful triumph, such as boasting, bragging, and taunting. If they lose, they may throw game pieces and insist on a "do-over," or refuse to play. For young boys in particular, the desire to win stems from a need to feel a sense of physical or intellectual dominance, which is built into their DNA.
Therefore, it's crucial that you teach your kids from a very young age how to handle failure. In life, they're going to win some and lose some - they need to learn to accept that. Your job is not just to make your kids happy. Not allowing them to experience failure only sets them up for an inability to cope with failure in the future. Moreover, it's actually the kids who practice losing who learn to be better. Mastering any skill requires many failures - even if you're great initially.
When your child loses in a competition or gets a poor grade, you need to use it as a learning experience. The end goal is to teach them that the joy of competing is having fun, not winning. Help your child learn good sportsmanship. The moment he or she starts exhibiting a "poor loser attitude" (e.g. arguing, making excuses, cheating, booing, or criticizing others), call them out on it immediately and let them know that this kind of behavior isn't allowed. Explain that they must be considerate of other people's feelings, and if they are not, they may not participate.
Teaching kids the proper way to cope with disappointment is extremely important. Make sure they learn from their mistakes, but also give them support with your words and knowledge. The quickest way for them to handle defeat gracefully is by feeling that ultimately you're OK with them.