Key told Autosport.com: "I think that what I've seen in the team is that there are two parts to it. One is the ambition to do it; I don't think anyone was satisfied with P9 in the constructors.
"Secondly, I think the size of the team and the resources we have - and [we] are building - is a big step obviously, and it's a big ask.
"But if we can put ourselves in the mix with the guys who were ahead of us last year, then there's no reason why you couldn't challenge for that position. I think it's possible and the belief and the will are there within the team to achieve. It's a great target to have."
The second winter test for F1 teams takes place in Barcelona next week.