Alonso wants a stronger and more complete squad, as there's no guarantee that any player will be injury-free next season. Therefore, Alonso must strive to retain Vazquez, as he is a reliable defensive player, which could also benefit Madrid if other players in the defense are unwell. And if Madrid can't retain Vazquez, they should at least find a more suitable replacement, whether that means bringing in an external player or training the current players.
Madrid's current squad is already very strong. I don't think there will be much change in this squad. There are many talented players in the attack, midfield and defense. Although Vazquez is a good defender, Madrid management may decide to sell this defender. Because Vazquez is now 34 years old. Xabi Alonso may be looking for a young talented defender for his squad now.
Real Madrid management has already been able to form a strong squad. Now Xabi will have to try to stabilize the squad. Madrid's squad is not stable yet. We saw Madrid's shaky defense against PSG. So Xabi will have to form the necessary measures and match strategies to strengthen the defense. I think Madrid's defense will be more stable if the players can adapt to Xabi's match strategy.