Both Barcelona & Real Madrid have had a perfect run in La Liga so far, I don't understand what you mean by Real Madrid hasn't improved.
Matchday #1
Mallorca 0 - 3 Barcelona
Real Madrid 1 - 0 Osasuna
Matchday #2
Levante 2 - 3 Barcelona
Real Oviedo 0 - 3 Real Madrid
Even though Real Madrid hasn't had impressive results, they've at least consistently earned 3 points. That alone is enough for me & several other users who like to bet on Real Madrid to win. Well, hopefully their performance won't be bad in the next few matches.
By looking at the past result of real Madrid, it shows that real madrid are not doing that bad as most people are making it looks like, though I still see them in a building stage.
Xabi Alonso is trying to set up a winning team, that's doesn't mean that he has a lot of time on his side, he needs to keep winning while building his team because if the results is not coming forth while building his team, he will be sacked in no distance time, and that is what he is doing.
When they are up against Barcelona or atletico madrid, that's when we are going to know how far they have evolved, but as for now, they are doing just fine in my own opinion.