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Oh this can be really fun. :) It's best to involve your other colleagues. The secret is to make sure that the competitive person has plenty of competitions to be in. Obviously, you ensure that they either win, or come tantalisingly close to winning, depending on what you want to achieve.
If you are imaginative and thoughtful, it is possible to get the co-worker to do much of your work for you, and also provide considerable entertainment for the team as well.
For example, time the coffee/lunch run. Somebody sets a fast time for going to the machine/canteen/shop for a standard order for the team, and a standard time of day. You fake this time so that it is unachievable, but only just. The competitive one can then be inspired to do the coffee run every day, trying to beat the time. They will get close, but never quite match it, since the whole competition is rigged. This soaks up their competitive desires and prevents them from being unleashed in a hardful way. The boss may or may not be in on it, depending on circumstances.
When they find out - and they will, in the end - point out, truthfully, that your objective was to make them happy. They like to be competitive, and you gave them an outlet for that every single day. This is true, providing you really were just managing their competitiveness and not deliberately humiliating them.
