Does anyone knows the actual reason for competitors analysis?
Can a competitor possibly create bad effect on my site's page Rank or SERP?

Hello Friends,

Doing any kind of SEO without knowing your competition first is pretty much pointless and will result in your getting lost. Before doing SEO for your own website, you should do a research and find out how your competitors are doing and how they are ranking for certain keywords. That will give you a huge advantage and will make things much easier and less time consuming for you. The very first thing you should do before doing anything else is to determine who your top 10 competitors are.

Many people wonder what they should start with when doing a competitive analysis. Here is a guide that will explain everything step by step:
1.Number of links:-The first thing you need to determine how many incoming links your competitors have and how many you have. This can be easily done with one of the numerous free tools out there. You can also take advantage of great add-ons for Firefox that will make your job easier. In case your competitors have more incoming links than you, you should take that into consideration and work on it.
2.Quality of the links:-After checking how many incoming links your competitors and you have, it is time to check the quality of those links because quality is just as important if not more important than amount. It is important that the incoming links are coming from high authority websites. There is an easy way to check the links and see if they are quality ones. Just use a website called Open Site Explorer and you will save a lot of time and effort looking into each link yourself.

Thanks