Link can definitely be an effective character in competitive play, but you have to make use of the following things (at least; others will say you need to master even more...) to have a chance.
-Have a working knowledge of the hit box and frame data for Link's moves.
Spot dodging! Link has the best in the game. Learn to time it correctly depending on your attacker's moves and decide whether or not you'll have time to punish or if you need to retreat.
-Link has a long list of advanced techniques. I would recommend mastering a few that really play well with your fighting style and are useful/versatile against most characters. Be able to perform some of the other ones and pull them out for surprises/mindgames.
-Speaking of mindgames, playing Link is all about mindgames. You must be strategic not only in how you use which moves, but when you use them and how many times.
-Learn how to correctly recover, especially against fierce edge guarders. Watching pro videos is great for this. A few tips: Learn Directional Influence, use Link's momentum to help recover, don't waste your second jump by using it too soon, and practice tether recoveries (this can turn the tables quickly and gain you a stock!).
-Develop your edge game. Go to every stage and see how far you can get off the edge before you can no longer come back. After this, test which moves can be used in these spaces and when. Also, learn to make use of link's tether recovery and the extra invincibility frames it gets you.
-Get to know the physics surrounding Link's projectiles and how they act in many situations. Even without considering advanced techniques, a well placed bomb, gale, or arrow can take a stock or even win a match.
All in all I would just say that Link will take lots of research and practice to be a viable competition character; however, the feeling of accomplishment will be much greater if you do manage to be successful. I have been considering becoming competitive with Link myself, but I think I have quite a bit of practice and advanced techniques to master before I can start hitting the tournaments.
Oh, and it wouldn't hurt to read the Link guides posted on the forums.