There are no shattering defeats like 1941 winter counter offensive, Stalingrad, Kursk and Bagration, rather it's series of large engagements that step by step erode gemran power.
What impact would this have on how the Western Allies prosecute the war? It was my impression that Stalingrad, along with being a very decisive victory from a strategic and morale standpoint, gave the WAllies the sense that the USSR can hold the Germans at bay allowing them to take their time in the preparations for hitting Western Europe.
If you don't have the crushing Stalingrad knockout would the WAllies be more likely to press ahead faster and take bigger risks? Could there be operations against Norway or the Balkans in an attempt to beat the Nazis through death by a thousand cuts? If it looks like the only way Stalin's going to win is by long, bloody slog that looks to them like the Western Front of WWI but bigger I could see that spurring them to try more desperate tactics.
The Germans will also have a big knock-on problem for their efforts: more men surviving means more materials are going to be needed at the Eastern Front. While it gives them more flex and options it also reduces how much they can spare for other fronts especially if the fighting turns into a series of meat-grinding slogs of the sort that consumes ammunition, parts, and fuel like nothing else.
No matter how things go on the Eastern Front if they can't find a way to miraculously knock the USSR down for the count by the end of 1941 or at least reduce them to full-scale retreat behind the Urals the Nazis can't win a two-front war with the USSR and the WAllies. Even if they aren't beaten on the battlefield sooner or later the resource requirements to feed the war machine and the massive resource advantages of the Allied powers will push their economy to overheating assuming the US doesn't open cans of sunshine over Berlin, Munich, and Hamburg first.
