It's the best way to defeat the alliance, without doubt. But I think that it would take too much time to help Austria, who would need support in the first weeks of the war, when fronts are still fluid. With a pressure on Alsace-Lorene the germans could lack enough manpower to drive deep into austrian territory. If the war turns into a trench warfare Austria has a sporting chance to survive for a while, but it's not sure that will be the case. IRRC during OTL WW1 the eastern front knew much more movement than the western front.
Sorry, I meant Russia' western front, id est Austria. The problem for A-H in this scenario is to survive: the pressure of german and russian armies combined would be too much for her, that's why I think that Austrian best chance would be a strong offensive toward Germany, aimed to the Rhine region to, eventually link up with the french. Mind you, I'm not saying that would be easy or else...
AB, you should remember that the military mindset in this period is quite conservative and hostile to innovations in terms of tactics and strategies. Much of the bloodshed of WW1 was due to this.
To tell you the truth, having three fronts seem a lot to me and even two doens't really smell of roses, especially one with Russia (lots of manpower). And I'm not even willing to touch that keg of gunpowder that are the Balkans...
As for the whole issue of military investments, I think that Germany, ITTL, would develop more her land army rather the navy (so slightly reducing one of the reasons of UK hostility), while the OTL german investments into the Ottoman empire would be probably devolved to Russia and Italy, though I can't quantify them right now.
Why,,,
the Navy league was one of the strongest factions in the Imperial gov't... Empire, colonies, prestige...you know that old bag. of Which Willie himself was a strong supporter.
As to investments...some would still go to these areas as they would want to have some influence in them and not leave it all to the French and Brits. Besides, commercial opportunities can't be ignored either.