The stereotypical young schoolyard/neighborhood bullies work through a very simple mechanism. Either through pure intimidation or physical domination. It is usually a mixture of both, as intimidation is usually a side effect of being physically dominant. These bullies tend to be bigger than their victims, but not always.
By the sapping the victim’s will, the bully ensures that he wins every confrontation, and the victim complies with the bully’s demands. One important thing to note that just because a person is intimidating, doesn’t mean they have any type of skill. While bigger size does give an advantage, it does not add to the bullies actual skill at all. This is why when victims physically retaliate, it is often effective against bullies unless they are pure nut cases.