Winning Hofen as Axis, with the new patches, on standard settings, is not easy, imho. Of course, I'm pretty imnpatient and having a lot of patience and an eye for detail really makes the diff in this game (I don't mean to micro-manage, but to use artillery, in particular, to block counter-attacks and reinforcements is, once again imho, pretty essential to win as Axis in this scenario - if you can spare some units (spare regimental HQs and a couple on infantry gun units for example, if ordering at battallion level) to block obvious reinforcement routes up to the Hofen ridge then that will pay well). It's a great starting scenario though, as the size of your force is very manageable and the strategic routes varied though obvious. Be sure to get up the google earth overlays and have a look at the battlefield on google earth as you go - gives a great insight as to visibility, objectives etc. Makes it more real too. You should probably set the zoom setting in google earth to about 1.2 to get a good idea of the landscape.
I did manage to score a minor (or marginal) victory on my first try as the Germans. Though perhaps it was more luck than skill as almost a whole battalion ended up routing west of Höfen. One company even reached Kalterherberg and managed to remain undetected there for rest of the scenario. The two other companies dug in on the roads between Kalterherberg and Höfen. On day two I was then able to sandwich the town and attack from all directions, and on the morning of day three there were hardly any organized resistance left. Of course, by that point my units were spent and unable to press the attack west.