Keyword list analysis will show which keyword to prioritize. A website must then be optimized so that in spite of the competition, it will gain a good ranking. It is therefore imperative to determine the competitiveness of a keyword and further use the knowledge gained to bring about the full potential of optimization.
What makes a keyword highly competitive will be based on the quality of sites using this same keyword. Thus it will be tough to get a good rank when the sites you are competing against are properly optimized even if there are a couple of hundred, then those numbering in hundreds of thousands but are poorly optimized.
As such keyword list analysis will then be based upon the quality of the sites you are going up against for every keyword.
Number of locations to compete with
Intitle and anchor, both Google tools can also help in keyword list analysis to determine the number of websites you are going to compete against. Intitle will show how many of these websites have the keyword in their header tag, while anchor will determine the number of sites which have the keyword as anchor text in an incoming link. These two results will then give us a rough idea on the number of websites you are going to compete with for that keyword. Though this would not provide us with the notion of how well these sites are optimized, they did give us an idea of how many optimized websites we are going up against.