The Dane believes that the Swans will need to invest in their squad this summer to avoid going backwards as he plans for the Capital One Cup winners' first Europa League campaign
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"At this club we cannot pretend to think that we are going to win another major trophy next year or even the year after that because that will be very difficult," the 48-year-old told reporters.
"However, if we're talking about the Premier League, I think we will have to improve just to stay where we are now.
"It will be very, very tough to stay in mid-table because some of the other clubs below us want to invest to improve."
As exclusively revealed by Goal, Swansea centre-back Ashley Williams has agreed terms to join Arsenal this summer, with reports linking clubs with moves for the likes of Ben Davies and Michu as well.