The Asian champions were knocked out of the tournament after a 4-1 defeat to Colombia in their final Group C match.
They ended their tournament bottom of the group with just one point, and Kagawa believes that a lack of cutting edge in the final third cost them.
"We can play well as a team, but in terms of individual quality, we are not good enough to score or avoid conceding in the final moments, which is the difference between us and the best teams in the world," he told reporters.
"We actually conceded when we had to try not to, and couldn't finish it when we needed to score against Greece. I think that made a very big difference. I would like to get it right so as to improve."
Japan have only made it out of the group stages twice in their five appearances at the tournament.