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I would suggest that you check your textbook and/or notes for an answer to this question. There are many challenges that Germany faced during most of WWI. Therefore, it is probably a good idea to find out which challenge your teacher expects you to identify.
There are at least two main challenges that I can imagine thinking of if I were the teacher who asked this question. First, Germany faced the challenge of fighting on two fronts for most of the war. Unlike France and England, Germany had to fight enemies both to its east and its west. This state of affairs continued until Russia was knocked out of the war by the Bolshevik Revolution of 1917. This allowed Germany to move troops out of the east and meant that it no longer had the challenge of fighting a two front war.
Second, Germany faced the challenge of trying to blockade the UK without antagonizing the United States. Germany wanted to try to strangle the UK by using submarines to sink ships attempting to bring supplies to Britain. The problem was that the United States generally disapproved of this policy, particularly when it led to the deaths of Americans. The US also felt that this denied its right to freedom of the seas as an ostensibly neutral country. Thus, Germany faced a challenge because it had to try to cut supplies to Britain, but it had to do so without bringing the US into the war. This challenge ended in 1917 when Germany decided it had to engage in unlimited submarine warfare regardless of what the US thought. This helped bring the US into the war.
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