Just two weeks after Mercedes took a commanding Australian Grand Prix one-two with Lewis Hamilton and Nico Rosberg, the champion team was defeated by Ferrari's Sebastian Vettel in a straight fight at the Malaysian GP.
The result followed a substantial reorganisation of Ferrari's F1 programme that has given the team renewed impetus after a win-less 2014.
Asked if Mercedes was prepared for a resurgent Ferrari, Wolff said he was confident in his squad's resources but admitted there was a need to react.
"I have read an article that Ferrari were ramping up budget massively," said Wolff.
"We have everything we need. We feel confident that with the amount of resources we have, the stuff we have, we are well placed.
"We just need to stay calm, continue to develop, put the right things on the car and put some things on the car earlier than we would have actually planned.
"But there's no reason to panic.
"We are back into a normal, regular racing season where you have more than just one contender."
Wolff suggested he was amused by how assessments of the 2015 F1 season had changed so dramatically from the Mercedes-dominating Melbourne event to the more open Sepang race.
"I think we mustn't be extreme with our assessment," he said.
"At Melbourne we were extreme in saying Mercedes was going to win the whole season and nobody is going to catch up.
"Two weeks later people were saying 'is this the end of an era'?
"It is maybe the start of a new era of a good battle, a battle we would like to take on, a challenge we want to take on.
"It is about staying calm and assessing and trying to come back with confidence and with the speed we have had in the last couple of races."
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