> For example, Ferrari is famous for making luxury cars that only a few of
> the richest people in the world can afford to drive. Ferrari is
> currently owned by Fiat, famous for making shit cars that no sane person
> in their right mind would want to drive, never mind own. So... how the
> hell did Fiat manage to afford Ferrari?

Because there are 2 million Fiats sold each year, yet only 5000 
Ferraris.  Which brand would you rather own?  Hint: if you choose 
correctly you could buy the other one with about 2 weeks of profit :-)

> Similarly, Cadbury, maker of fine chocolates, was recently bought by
> Kraft foods, makers of naff cheap crap. How the heck did /that/ happen??

They offered a high enough price that was acceptable for the company, 
much like any other trade.

> Uh... I'm not sure that (say) Tesco's own cornflakes are made by the
> same people as Kellog's cornflakes.

Maybe not that exact example (I have no idea who makes Tesco's 
cornflakes), but plenty of companies make their own brands and also the 
stuff for supermarket brands.  They already have all the equipment and 
logistics in place, plus a reputation with the supermarket, it will 
benefit both companies in the end.

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