This is a term commonly used to describe how search engines rank your website relative to your competition. The competition itself is defined by the search terms used to find your website.
The three largest search engines are Google (80%), and Yahoo (9%), and Bing (9%). Websites use an algorithm to determine which sites get ranked. The actual formula is a highly guarded secret.
These simple ideas are usually most effective in improving your ranking:
1) An ideal domain name would contain a key search term for your product or service.
2) The key topics or tabs in your website should also be likely keywords in a search for your product or service.
3) Content in your website should be written with these keywords sprinkled liberally in the writing.
4) Your content should be readable. Graph, photo or flash type content cannot be read by a search engine.
When developing a website always start with the easiest things to achieve and then work on more sophisticated applications.