Following is a quote from the developers:
In todays development diary, we'll give you the first exclusive AAR of Hearts of Iron 3. I give the word over to King, who will tell you about his recent game as Italy.
Italy – 1938
While Germany slowly dismembers Czechoslovakia and Japan advances in to
China Italy has grander plans. Our goal is simple Yugoslavia. The
Italian people are ready for war and to we are confident that the
Italian army is superior to the Yugoslav one. So unless someone
intervenes we are confident of victory. We also do not have enough
resources to sustain our economy on a war footing, we can either buy
these and have to divert IC in consumer goods production to pay for
them or we can simply take these from other countries stockpiles.
Yugoslavia becomes a much more attractive target. Will there be
consequences from our act of liberation? Most probably but the
experience will be useful for our armies.
In 1938 the Italian armed forces are divided into 3 theatres, one
covering our recently expanded Italian East Africa, one covering Libya
(and Rhodes) and one covering Italy proper. All are put onto defensive
stance, but the Italian theatre is given Belgrade as a specific
objective. Then we wait.
The theatres start to put their units into defensive positions but the
Italian theatre places special emphasis on the Yugoslav border since it
knows that Belgrade is an objective. Meanwhile Italy upgrades troops
and researches new equipment. We start with 4 battleships in production
and we just leave them on. Italy is a member of the Axis, it knows
Britain and France are Allied countries and are thus likely enemies,
all theatres are crying out for more ships to meet this threat. We also
start to build Radar Stations. One in Rhodes to start monitoring the
Eastern Mediterranean and one Taranto to do the same in the Central
Mediterranean. It will take a while for these to become truly effective
but if we are given enough time we will have good monitoring
capabilities on Allied fleet movements. When spare IC becomes available
a third radar station will be built in Sardinia to give us warning of
movements in the Western Mediterranean. 
We have also increased our peacetime draft level; this is part of the
formula for a quick victory over Yugoslavia. Our gamble is that the
Yugoslavs will have a much lower draft level meaning that even if we
hit them without a proper mobilisation our divisions will have a much
high strength and organisation than the Yugoslav divisions. However
this is a trick we will probably only be able to pull off once.
Neighbours of Yugoslavia will see us an increased threat will probably
mobilise their own armies at the thought of having Italy as a
neighbour. Hopefully Yugoslavia will provide us with enough loot to
sustain us until the next campaign.
This is sadly going to have to be a winter campaign, not a lot we can
do about this. We want Yugoslavia out of the way before the war in
Europe begins. Although things aren’t going to quite ready by then we
set D-Day for the 1st of December 1938. We are going for the limited
war because we do not want to share any of our conquests with Germany.
This is going to be an Italian only show and we are going to show the
world the power of the Italian army. 
The Italian theatre is set over to Blitzing stance and the assault
begins. The battle of frontiers goes exactly as planed. The Yugoslav
divisions are heavily under strength as they had yet to mobilise and
they shatter under the weight of the initial Italian assault.
So now it becomes a race. The Italian army needs to seize as much of
Yugoslavia as possible before the shattered divisions are rebuilt
enough to slow us down and fresh reserves appear on the frontline. 20
days into the war and already Yugoslavia is collapsing. 
The glorious march continues, but it looks like future victories will
be less easy. The Swiss have mobilised and we suspect that new
neighbours we gain when we finish with Yugoslavia will probably do the
same. However in the mean time we enjoy the victory. We are going to
score practical war experience to help with doctrine research and also
gain experience for units and leaders. This will help in future wars
that we know will be much tougher. Basically our troops are advancing
quick enough to prevent a new line of resistance forming. This was a
war won by a combination of surprise and preparation. The Yugoslav army
has its last stand around to Belgrade the troops are already so
weakened that they will not stand for long against the Italian army. 
With that out of the way Belgrade falls and Yugoslavia has been
‘liberated’, after 3 months of fighting. So ends this little AAR. What
would of happened next with Italy? Well I would of activated the
decision to annex Albania next and then looked to do something about
the over all mobility of the Italian army. The troops will need to be
faster when taking on better opponents like the United Kingdom or
France.
