This “Combined Axis Fleet” strategy has served me well in past Axis and Allies games, its only downside is that Russia usually gets huge and can become a problem if the Axis don’t expand fast enough.
If the Axis strategy is to simply wail away at the UK for 3 rounds to form a buffer zone between them and the other Allied powers, it might be possible to pull off a Sealion/Baltic Sea strategy. An Axis fleet in the Baltic has been an excellent counterweight to Allied fleets in the Atlantic in previous games, and since Germany starts out this game with a battleship, the Baltic is more viable than ever. If the Axis build a sub and transport a turn in addition to air units and some infantry, there could be enough of a fleet to threaten Britain and keep them “honest” in building land and air units to defend the island and not constructing naval units. No naval units means not sending Allied reinforcements to the Med, and especially if they don’t build any new destroyers, your subs can leave the Baltic to raid convoy zones.
The lack of a UK navy should add up to Italy owning the Med throughout turns 2-3-4 and hopefully overrunning Africa. For want of better things to do, Britain will probably be sending some troops up from the SA minor IC, but Italy should be outproducing/sending more troops to the African theater to combat them. 3 inf a turn produced in SA means 3 inf not produced defending the UK, plus Britain is probably feeling the IPC pinch without any NOs and the loss of most of Africa. The UK should be looking pretty weak by turn 4, with maybe 15 IPCs a turn, and after SBRs and sub convoy attacks reduced to even less than that. Meanwhile, Japan is setting up to crush India, if they’re smart, by turn 3-4, and hopefully will be able to reinforce the Italian Med fleet by sailing part of their Indian fleet through the Suez by turn 5. The US player, when he enters the war turn 4, should be facing a reinforced German fleet in the Baltic, a combined Italian/Jap fleet blocking access to the Med, and a sizeable Japanese fleet in the Pacific blocking off Australia. The US will be forced to pick and choose, limiting his options, plus it will take several turns for the units to even get there to the right theaters. A lot of his units will probably be sent to the UK anyway as last minute reinforcements. Anyway, the Axis should have free reign of much of the territory on the board and should then concentrate on bashing up Russia and holding down Britain.
The German fleet MUST also be used to invade the Soviet Union in the Baltic as soon as it is possible so it is not simply eating up IPCs waiting for the UK to fall. Hopefully by this time Germany will be getting several NOs and have enough territory so that it can reinforce its fleet AND build enough land units to invade the Soviet Union. This strategy’s Achilles heel is Russia, which will have 3 turns of neutrality to build up land units to which Germany will not have been keeping parity with. BUT it is very good at keeping the US and UK out of the Med, and done right can make Italy a powerhouse that can help out in defending Western Europe and invading Russia.