please share your experience about understanding competition, for me it is very difficult task.

I am also seeking solution just like you.

Competition in SEO is simple, Just make sure your website got the right quality and traffic. SEO is competitive when you compare with multiple search engines. They simply differs on algorithm. As a result its a challenge for you what SEO tool you will use to optimize your ranking.

hi
the no. of sites using the same keyword as yours refers as the competition.

No work is easy but if you try your best that work becomes very easy for us. To stand good in Seo we need to write unique content and need to create good quality backlinks and hard work.

Understanding competition manually would take an eternity.

Its better if you leverage the power of some tool to ease the process. That is why I prefer Keyword Country to track my competitors' ranking, traffic,SEO and PPC strategy and I am surprised to see how aggressively they are working!

As per my experience I have suggest you to use the Google Adwords Tool for understand competition in SEO. It is the best tool which is provide by Google. It gives the information about Competition Rate, how many Global searchers and how many Local searchers for particular keyword or you can also do one thing that search your keyword and see how many results are available for particular keywords so that you can understand the competition for particular keyword.

To understand the competition in the SEO you need to do the analysis of the website and understand the keywords for the website. You need to know about the requirements of the users and according to the need of the users you have to create the contents and post it on your website. Thus you can increase the back links and increase the traffic to your website. You can choose the different SEO techniques, PPC campaign according to get the traffic.

To understand your competitors in SEO, use SEO tools like "opensiteexplorer" which will enable you to see your competitor Top keywords, anchor texts, links they use, etc. It works very well.

Just look at what recently happened to US retailer whose SEO company didn't help them excel with Google but instead got them in some hot water.

I think you can understand competition by checking top 10 sites in Google, how they have done on-page and how many back links they have also check the quality of back links, content of sites, flashy stuffs on sites etc.