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A coach will be able to bring out the best potential from a club if the club has players and a style of play that suits the coach. That doesn't mean that if you are very great as a coach at a club, it doesn't necessarily mean that you will be even greater if you coach a club with higher quality players. There are many factors such as the coach's approach to the players or how the coach manages the existing squad to be able to play with the expected tactics. I agree that Xabi is a great young coach at the moment but if he were to coach Real Madrid then it would be a different challenge.
Leverkusen and Real Madrid's style of play doesn't seem to be that different. Xabi has a good approach in maintaining possession of the ball and creating lots of goal opportunities, so this is almost the same as Real Madrid's style of play. But I agree, the challenges will be different when Xabi coaches Real Madrid or any team in the following seasons, that's because each league will have its own unique style of play.
Xabi Alonso is a young coach who has a good future in his coaching career. He must stay with Leverkusen for several seasons while testing his technical and tactical skills in the Bundesliga. If he is successful then he can accept proposals from any team in a different league, including La Liga with Real Madrid.