I would you to target at Google first page to start with rather than top 1.And you can plan a 4 to 6 months time depending on the intensity of your SEO for it to reach there.Your competition may be good,but its always good to have a competition and with some good SEO done and better offering of service/product from you,you can very well get onto the podium.Internet is the greatest equaliser.SO dont worry,focus on what you offer and out source the SEO task to a professional on per performance basis.It is possible to break the competition.
Just like to add...focus on good quality topical links rather than quantity.Articles and press releases submitted at appropriate places on the internet should do a world of good to your website.
In meaning analizing is somewhat different from analyzing!
IMHO you should focus only on keyword density, meta tags, rapidly updated content, backlink building and sitemap.
Anything else is superfluous.
Just focus on these strategies and you'll see the results.
Get at least 1.5x the value in values as compared to your competitor, since you can't anticipate what they will do once you take the #1 spot.
If you have an advantage in terms of backlinks, you'll have time to figure out the next move to retain your #1 spot.
Backlink value has more to do with anchor text, PR of the page, relevance of the page/domain and outbound links from that page.
Try to get links from several domains, rather than the same few.
About keyword density. The sweet % is somewhere between 2% and 5%. Figure out what it is for your niche and competition level.
Use plenty of tags if you make a blog along with the site.
Try to avoid submitting content to article directories unless they are highly reputed and rank #1-#3 for most searches. Google may decide to devalue those links any time.
Better do link exchanges, slowly, with relevant blog and website owners.
Outbound links from your site/blog are also important. Linking to wiki pages and relevant PR8-PR10 sites makes your content more useful.
I'm sure other Warriors will know a lot more and have more experience with this stuff, so I'll let them help you
success in SEO doesn't happen overnight, I was in your place before, just give it time and a well thought-of strategy... be patient with results, Google is fair