  We use a simulation performed within the Constrained Local UniversE
Simulation (CLUES) project to study a realistic Local Group-like object. We
employ this group as a numerical laboratory for studying the evolution of the
population of its subhaloes from the point of view of the effects it may have
on the origin of different types of dwarf galaxies. We focus on the processes
of tidal stripping of the satellites, their interaction, merging and grouping
before infall. The tidal stripping manifests itself in the transition between
the phase of mass accretion and mass loss seen in most subhaloes, which occurs
at the moment of infall on to the host halo, and the change of the shape of
their mass function with redshift. Although the satellites often form groups,
they are loosely bound within them and do not interact with each other. The
infall of a large group could however explain the observed peculiar
distribution of the Local Group satellites, but only if it occurred recently.
Mergers between prospective subhaloes are significant only during an early
stage of evolution, i.e. more than 7 Gyr ago, when they are still outside the
host haloes. Such events could thus contribute to the formation of more distant
early type Milky Way companions. Once the subhaloes enter the host halo the
mergers become very rare.
