I think Xabi Alonso already knows this, having played for Real Madrid as a player before retiring and becoming the coach he is today. So, he probably understands this better, and he's simply trying to make Real Madrid better by relying on the existing players with a different tactical approach than last season under Ancelotti. Real Madrid still needs to invest in several new players to strengthen their key lines, as Real Madrid's current form is still lacking, and this was truly evident when Madrid faced PSG in the Club World Cup.
And for what positions does he still need players, except for the midfield. But I think that he has already used everything he could for transfers, and after the disastrous match with PSG, it will be more difficult for him to get money for new transfers, because he should have won this tournament, but instead they played a very bad match with PSG. I think that Alonso has everything to play well this season, and I doubt that there will be any new transfers.