You can only rank for as many keywords as your budget and level of competition allow. It's more efficient financially to zero in on a handful of keywords and master them than to stretch yourself unnecessarily broad.
Focus on keywords that will bring you the most money or profit to maximize your return on investment (ROI). Unless you're dealing with extremely high volumes, it's usually not worth your time to invest in low-priced items and services.
Prioritizing high-visibility items and competing for keywords that will increase leads for those items or related ones is the ideal strategy. You may also try to fill a gap in the market by producing content that is of higher quality and more relevant to your target audience than anything your competitors are doing.
For an SEO competitor study to be successful, you need to identify a gap in the market that your rivals haven't yet filled. Using keywords with low levels of competition as a springboard to enter new markets is not impossible.