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You give too much time to allies. You give them opportunity to train new units, build military factories, make gap in navies and airforce even bigger than it already is. Time is not on your side when playing Italy or Germany. You're able to start waging war right off the bat as a fascist. Why not take advantage of that? More so why negate this advantage completly?
It doesn't really matter that much if world tension get to 100% in '36. It still takes time for allies to build new factories, get rid of variety of maluses they start with, get focuses done and so on and so on. Use it to your advantage. Grow from the start. If you won't then, yeah, you won't be able to keep up with their building capacity and you'll find yourself in '39 with only a couple of factories. It's all about snowball effect. More you have faster you get new stuff. Simple as that.
More so it doesn't matter if Germany declares on Poland while world tensions are at 40 or 100%. End effect is same, world war starts either way. Again, use it to your advantage. Getting new territories asap gives you opportunity to build more factories faster, train new units and so on. Before global war brakes out. Use it.
Defeating allies in Africa is easy. They have crap forces there and it's unlikely they will strenghten them much before war begins. Train some small and fast division with logistics support if you're able. Motorized is best for that. I use 2 motorized, recon, logistics, engineers and support arty as my Africa template. It's enough to beat allies there. You need couple of normal sized divisions to fight theirs on the northern coast of Africa. But that's all. Rest of it can easily be conquered with really lighweight forces. And you can easily build enough divisions IF you expand early on.
As to conquering stuff. Yugoslavia and Greece are obvious choices but are they the best ones? Maybe go for Denmark and use Greenland to launch invasion of US while they're still stuck with great depression, isolationism and so on. US is really weak in the beginning. And even if you put world tensions to the limit early on it doesn't change much for them. Sure, you open up lots of their focuses and such but they still take time to complete. It doesn't magicly happen overnight.
Another thing you can try is to go for France. They are in terribad situation in '36. You can beat them as Italy in '36 or '37. You have enough divisions and you don't have to look for alternate route, you don't have to deal with the Maginot Line. You have very nice Alpine division template, with decent support and lots of basic mountain infantry. Paradoxically taking France will also help German AI greatly. It will not make so many stupid decisions, it won't waste lots of frontline troops to garrison French coast and so on. As a bonus you get to use all those French factories for a long time.
Basicly play to your advantages. Not against them. I think that is your problem :) Hope that helps at least a bit.
When you start the game in 1936, start boosting the facist party popularity in the US, continue until it's above 70%.
After that try to grab as much of France as you can, in my Itatly Campign I actually managed to grab the whole thing. AND INVADE GIBALTER, it prevents the allies from coming in the med if you can hold the suez cannel with it.
After that leave the USSR to Germany, you will help the Germans a lot more by beating Britain. You do have a semi-decent navy which if you use the navy+land based navel bombers you could possibly invade britain with a navel invasion...
Or you know... Just use paratroopers like everyone else. Either option you take you are going to need a lot of fighters...lots.
Make as many Military factories as you can, and load up on nothing but infantry stuff (rifles, artillery, anti tank, motorized). Kill Ethiopia, immediately go for Yugoslavia. After Yugo, take Albania, then Greece, then Turkey. If at any point the French of UK are going to have a go at you, stop eating the little guys.
Join the Axis ASAP so when France or UK decides to slap you down Germany will immediately help you. Do nothing but infantry divisions. You need as many divisions as possible as fast as possible, armor takes too long to build. Cavalry divisions will serve fine in place of tanks. Blitz Paris when Germany has them distracted. Germany vs France happened in 1937 for me, because all my warmongering forced France's hands.
leave Germany to deal with Russia. Use your navies to protect your coast from naval invasions, and start pumping out submarines galore. Set up a naval invasion of the UK, and leave it 100% ready to start once you have naval control of the channel. Send all your subs into the channel and the invasion will be a go despite only having naval supremacy for maybe a day or two. If you manage to land even 10 divisions near a port, you've already won. Float the rest over and the UK is yours. Move to the Russian Border where Turkey used to be. 99% of Russian divisions will be on the border with Germany and Japan. Once the war kicks off, push up to Moscow, you will have near 0 resistance. Leave some guys behind to cover the East and push West, crushing 90% of the Soviet army between you and the Germans. GG Russia is dead.
This screen cap is my Ironman Italy file. I got Paris, London, and Moscow before the Germans did. I had about 72% participation against Allies and 60% against Commintern.
All I did was mass infantry divisions and snipe Allied victory points while Germany pinned most of them in place.
http://steamcommunity.com/profiles/76561198046996461/screenshot/271721445299668099
That isn't "occupied" by the way. That's all post Peace Conference.
I should also mention I always abandon Africa. Africa sucks and it's worthless in the long run. I always leave it and come back after I beat France. I gave all my African/Middle East lands to germany and spain because I didn't want to deal with defending it.
Here's a shot of the war with Russia, to show I did 90% of the damn work.
http://steamcommunity.com/profiles/76561198046996461/screenshot/271721445308919957
Same with France:
http://images.akamai.steamusercontent.com/ugc/271720913764913973/0596FAE696F2783D3110B525BFF0A22D2767E981/
Meantime you prepare for war you cna have volunteers first in spain and later in China-Japan war too where oyu cna help Japan a lot if you micromanage it well (my light tnak divisions do alot of encyrcling jobs there) - actualy early Japan victory in China is imho the msot crucial factor for Axis success in singleplayer game. Also remember everything you "stole" from Germany (liek inavde France yourself) will be missed by Germany later so you are weakening your allies.
Best thing you can help Axis effort is to get lot naval bombers, destroyers and subs, and help clear seas of Allies naval supremacy and invade England yourself (as German AI hardly do it).
SO I would go like this since great war start - secure Suez and Gibraltar to "lock" mediterran sea, focus on air supremacy over english channel and invade England. FInish off Africa later and /or help with soviets. Once SSSR fall, you won the game and its just matter of time before you make your way to conquer US (sadly neither Germany nro Japan will probably help you much with that)
You are right almost elsewhere but this makes no sense. You will use the resources, and if you are better player than AI (which you should) you will squeeze more out of them.
Step1: ANNEX Ethiopia.
Step 2: Declare war on Yugoslavia before 1938. Their factories will help you. If you want to puppet Serbia or Croatia, go ahead. Their future divisions may come in handy. Churn out rifles, support equipment, and artillery to field a large ground army.
Step 3: Keep about 180,000 men in Libya and another 180,000 in Ethiopia for a future war with Britain and France.
Step 4: Do not form your own faction and do not make the Pact of Steel. Wait to see whether Germany does well or not.
Step 5: Go after Greece, puppet Crete so you can keep their navy. Romania may declare war on you because of a vague guarantee system, but invade them too, Italy is capable of it.
Step 6: If Germany begins to lose to France and GB, help them out with volunteers and planes. If they defeat France, wait until 1943 to join the Axis. Your navy should be big enough to hold the Mediterranean.
Step 7: What happened to me was Germany lost and was puppeted by the Allies. I was attacked by the Soviets, but they can't do much when they;re going through the Romanian mountains in between Bulgaria and Hungary. Spain then joined Japan's faction and I followed suite. Long story short, Spain, Italy, and Japan carved up the world between each other. Very unique outcome, the Spanish offensives played a huge part in winning against both the Comintern and the Allies for the Greater East Asian Co-Prosperity Sphere.