It is difficult without hindsight to say that it was a mistake after all the shipbuilding plan was looking at bearing fruit between 1944 and 1948 - not 1939 and 1941!
However Germany is unlikely to be able to match the United Kingdom - I mean lets consider that Germany had war not occurred would have built 1 possibly 2 CV by 1944 and would have completed the 4 BBs (S+G and B+T) while the UK would have built 9 BB (5 KGV and 4 Lions) with possibly 2 more Lions on the slips and have built 6 Armoured Fleet carriers - not to mention what they already had - France would have built 4 Modern BBs and 2 fleet carriers
Of course Italy and Japan might even up the odds slightly (if we ignore the USA!) but when this plan needs to be instigated which is likely mid/late 30s that is all an unknown.
I think that the only way that Germany could win WW2 (aside from defeating Russia ASAP) - is to successfully blockade Britain as efficiently and as early as possible in an effort to bring her to terms.
As she has no way of taking on the British fleet directly to achieve this - the blockade must be via 'Asymmetrical Naval warfare'
- For this they need effective LRMP A/C in sufficient numbers (without knowing that they are going to hold France and Norway in advance) - this A/C capable of VLR and also capable of taking the opportunity to attack undefended merchants
- A larger than OTL number of raiders - both converted merchant ships (build a larger number of fast 'refrigerated' Long Range Merchants in the mid to late 30s with existing hard points for guns etc suitable for fast conversion to raiders with mine laying capability) and fast long range Crusiers (the latter capable of out running a British Cruiser therefore it does not need larger guns - the max should be the 5.9") and both types capable of carrying a spotter plane. I would build these instead of the Hippers and Bismarck/Tirpitz and dont even start GZ.
- Destroyers - don't over engineer - make them fast but more littoral in nature - again give mine laying capability
- A much greater mine laying ability at the beginning of the war - ie ready to quickly convert suitable vessels as mine layers at the beginning of the war
- And more submarines with the understanding that no more than 1/3 on average of the submarines will be on station at any given time (the rest in refit, training or in transit to or from station)
Now obviously there are issues with this plan
- Firstly the Luftwaffe would be providing the LRMP A/C and we all know the politics involved that would probably prevent this from happening - certainly in enough numbers - not sure how to circumvent this!
- The Raiders both Merchant and Cruiser are likely to have been swept from the seas by 1941 - so they and the subs need to get in their 'licks' as effectively as possible - and if the war is not over by then - well German is likely in trouble anyway!
- I don't think that anyone really appreciated how quickly airpower would improve during this period and how emerging technologies would all align to defeat the U Boat threat by mid war as well as becoming a serious and credible threat to warships. So this cannot be planned for. But improving airpower and associated technologies would scupper a number of the 'war winning' ideas I postulated above.
- Mine warfare is not a war winning tactic or strategy - not on its own by a long shot - the British generally were able to keep ahead of this particular technological curve and had the vessels and expertise to combat it. That being said mines did contribute to a large number of sinkings and are a relatively cost effective way of contributing to the grand strategy of blockading the UK. Of the above I think this is the easiest to improve.
- Not building Battleships....This was seen as a national and political statement at the time 'look at us we have gert great Battleships' just like the big players - 'you need to take us seriously!' - think of them as the ICBMs of the day - so not building all of the 4 BBs is a difficult decision at the time especially as Britain and France and the USA have so many and are certain to build more from 1937. Certainly they did prove useful in keeping the Royal Navy focused and if they were not built - what do the British do - slow down the construction of the KGVs, layup the Rs and use the crews for other ships and use the extra resources to build more DDs and escorts?
- This of course impacts the ability to build lots of lighter LR Cruisers and more DDs. Although the construction of a class of long range fast freighter than can be rapidly modified to become a raider would also be relatively easy to implement - although finding crews would be hard to implement*.
- Building more U-boats. Its an obvious one - but the obviousness of it go both ways as U-boats have but one main reason for existence - the Blockading of the UK - a UK that is acutely aware of the impact U-boats had in the previous war and if they realise which they likely would that Germany is constructing lots of them - it as much as anything is going to change the UK's attitude to other events at the time. Also while USW is the most effective use of the U Boat it brought the USA into the previous war.
All in all I think that this alternative tactic will not work - the ability of the allies to build lots of aircraft which depending on the threat can be adapted rapidly - ie VLR Liberators used instead for purely ASW and maritime patrol purposes in 1941 rather than just a handful of them!
The Geography of the Battle of the Atlantic even with Norway and France in Axis hands - still massively favored the Allies
And lastly regardless of the formation, strategy and tactics used by the German forces involved in what is ultimately the Battle of the Atlantic it is going up against the world's then largest navy and then increasingly against the other worlds largest navy
*Regarding crews for the merchant raiders - it must have been apparent that once war with Britain and France began Germany's Merchant fleet would rapidly be swept from the seas in matter of weeks - so perhaps subtly many ships are recalled to Germany or friendly ports and this provides a larger pool of potential volunteers for those ships?