Search is very competitive. For each query, a user enters in a search bar, search engines come up with a huge number of results. Which means that unless you sell socks hand-made by Argentinian mountain monks, it's more than likely there're businesses offering similar products or services to yours. And to win the competition you can't go without competitive analysis.
When done properly, it gives you tons of insights into the competitor's strengths to learn from, as well as weaknesses to take advantage of. However, competitive analysis often seems complicated to those who have little SEO experience. Below, I tried to describe it in the form of a simple step-by-step guide aimed first and foremost at beginners.