"I've said on many occasions that we have to get the balance right in the squad and that we would make it a priority to strengthen key areas of our group for next season. That is what we are in the process of doing," said Davies.
"We are targeting the signing of some quality players in the back three which we expect to announce shortly and will bring some much needed depth to this area. However, we also have to operate within the context of our playing budget for next season and ensure the sustainability of the region going forward.
"These are not times for impulse decisions, we are looking long-term and our strategy must be to focus and strengthen in key areas to ensure we remain competitive in Europe next season."
Davies was making the comments after centre Gavin Evans had confirmed his move to arch rivals Cardiff Blues but the Scarlets coach remained upbeat despite losing the long term servant.
"We are obviously disappointed to be losing Gavin, who has been with us a long time and been a big part of our squad over the past few years. He has obviously developed here, and from here got his cap for Wales. This has brought him into the focus of other teams and his representatives have looked at what they believe to be the best deal for Gavin. When that happens it is not always possible to hold on to players, particularly when we are trying to improve in other areas and doing so in a responsible manner."
Davies added that the squad was strong in the centre and he was very positive about future partnerships in this area.
"We have plenty of strength in this position with the likes of Regan King and Jon Davies who has performed so well already for us and is certainly a future Wales international in the making.
"We also have Rob Higgitt who made a great start to the season, before being injured, and two very talented Wales U20 players, Scott Williams and Nick Reynolds coming through - so the future looks bright in terms of Scarlets centres."