If Warren Gatland was not fully aware of the challenge he faces as Wales coach, the past two weekends of European rugby will have made it pretty clear. Llanelli, the leading Welsh club in Europe over the years, lost heavily last weekend and exploded on Saturday at home to Wasps. Cardiff drew against Harlequins, not the most redoubtable of opposition, the Dragons slumped at home to London Irish, and the Ospreys lost at Gloucester.

Welsh rugby is suffering, and it is partly a hangover from the World Cup. Like the Irish they were stunned in France. Not getting out of the pool stage was a poor result for the investment and work that has gone on in recent years. Not that there weren't warnings.

Wales have surprised every other side in the Six Nations in recent years on occasion, even winning that grand slam in 2005, but they have also looked vulnerable away from home - and there weren't enough games in Cardiff for them in this year's World Cup.

The investment was there, in the regions and the coaches, there are talented players, but there were also hints that all was not well - the questions over Stephen Jones at fly-half in spite of his being the regular incumbent and the captain, the debate about Gavin Henson. It didn't smack of a campaign starting from a solid base.

Given that Gatland turned down a job with the All Blacks, it's a fair bet that Wales have invested heavily in him as well, but given the many questions in front of him that he has to resolve, and quickly, he must be wondering where to start. He's a good choice, a man who has the experience and has transformed sides wherever he has been. But in club rugby, you can look anywhere for your talent. With Wales, he is restricted to those available to him.

There is a generation of players which appears to have done its time - players such as Colin Charvis and Martyn Williams, for example - which now needs to be replaced. It will not be easy to find a new Williams, a man who was rarely seen but was everywhere on the pitch. There is James Hook to be nurtured, and Jones needs to be given confidence and form.

At one point, during the grand slam year and the 2003 World Cup, a modern "Welsh Way" looked to have been established, a creative style with a lot of tempo in the game and plenty of width. The Way, however, seems to have been lost. It is as if the Welsh have asphyxiated themselves, and the malaise is reflected in crowds that, when the World Cup visited Cardiff, stayed away from the Japan game.

Gatland does have some things on his side. There are established players who had good World Cups, such as Shane Williams and Tom Shanklin, while Ian Gough has also impressed me. There is potential everywhere, but Wales' Kiwi coach has to define a style of play, which should not be too ambitious at first.

That decision will dictate how he handles the half-back conundrum, where the trainer needs Jones to pass the torch to Hook, who can benefit from his experience, and where he has to decide between the physical Michael Phillips and the more elusive Dwayne Peel. On another note, Gatland will find a captain in place, the prop Gethin Jenkins, which seems a strange move - why name a captain now, when there is no knowing whether he will end up being permanent? It's a little bit hasty.

There is, some say, the Henson question, but that should not be too hard if Gatland avoids becoming fixated on this one player. Henson is potentially one of the best players in Wales but he is not in the best of form. Guys like Shanklin and Sonny Parker can step in for him while he regains form and confidence.

Already, Gatland has raised the issue of foreign players, but that is an open question. Take the case of Justin Marshall and Phillips at the Ospreys. You can claim that Phillips would have been better staying at Cardiff, because he is in competition for his position with a player who has cost the Ospreys a lot of cash, and who - given Marshall's record - brings huge impetus to the team and isn't there to sit on the bench.

One thing is certain, Gatland needs to find more depth in his squad, because there have been difficulties when Jones or Peel has been injured, or a prop is under the weather.

There has to be a huge investment in youth to get new talent through - immediately, but what Wales need most is a dynamic of success, so that there is momentum, the grounds fill up and the country starts to get behind its sport again.

He needs his provinces to shine in Europe, which unfortunately brings us back to where we started.