I think it's very interesting to see Xabi Alonso as Real Madrid coach, certainly because of his playing style, it's perfect for a talented team like Real.
It's not easy to manage all those players, but I'm convinced that a coach like him is able to do it without problems, having always played for big clubs.
The reason why Xabi Alonso will not face many problem if he becomes Real Madrid coach is that the club comprises of so many talented players already, so he doesn't have much work to do as he did for Bayern Leverkusen because it took him time to build Leverkusen and they won the Bundesliga flawlessly which means that if he applies same coaching skills at Madrid, he will definitely excel over there. The best decision for Alonso will be to manage Real Madrid so that his stars will keep on shining and he will also have that feelings of coaching one of the best teams in Europe. What Madrid needs is a coach that can listen to the players and know what they want and how they can apply their talents to win many games.