Real Madrid has won the Champions League more than any other team but this year I doubt they are capable of doing so because they are missing a top quality player to make a difference.The best they can do during this season is to get a place in the top 4 standings which surely is in their capability.
In Champions League, it is for moments and Real Madrid can win it if they have some excellent moments and enough luck. However, you are right that they are not enough competitive this season.
Many say that Zinedine's time at Real Madrid is over and to me that would be ok. He was great there and now the time is ripe for him to search fro some new challenges somewhere else as he can clearly can't do much more at Real. He won everything that could be won with Real, three Champions League in a row. It's time to take some time off, rethink his priorities and start afresh somewhere else. Maybe at Juventus?
Zidane if he is sacked, is only a mean of President to hide the flaws in Real Madrid squad. The squad need to be rebuilt and the new manager will struggle to build it up from scratch, and look at Koeman in Barcelona, it takes 2 seasons maybe. Koeman in Barcelona can not help them to be competitive in his first season as Barcelona's coach.