There is an easy way to discover which keywords your competitor is
bidding on.

This service called swerush.co.cc allows you to type your competitor's
url and it'll find the keywords they are purchasing on AdWords.

The way it works is that they have a crawler and a large database of
keywords and they just query Google for all those keywords.

So the first difference will be that you'll not know what your
competitors are actually buying, but rather for which search queries
they are showing (which actually is more important anyway).

To use it for AdWords you use your competitors URL followed by "(by
adwords)".

Click here to try it: http://www.swerush.co.cc