Asking as a non-American non-school-pupil-parent: what does it mean for a school to be competitive in this context? Competitive entry into a school I understand

Asking as a non-American non-school-pupil-parent: what does it mean for a school to be competitive in this context? Competitive entry into a school I understand, but that threshold has been cleared. Isn’t US college admission based on essays and standardised tests like GMAT, SAT, GRE?