Kingfisher said the £800m strategy would help it become a "single, unified company" and return £600m to shareholders within three years through a share buy-back scheme.
The company said a key part of the plan would be to ramp up its digital operation and open more trade-focused Screwfix stores across Europe.
But shares fell more than 3% in early trading, with some City analysts underwhelmed by the plan.
The announcement comes in the wake of a shake-up in the home improvement sector after rival retailer Homebase was taken over by Australian business Wesfarmers in a £340m deal earlier this month.
Kingfisher chief executive Veronique Laury said the new strategy would focus on "three key pillars of creating a unified, unique and leading home improvement offer, driving our digital capability and optimising our operational efficiency."
She added: "With a clear roadmap now in place alongside clear long-term targets, the size of the five-year opportunity is significant. We do acknowledge the challenges ahead."
Ms Laury announced cost cuts last March, including shutting 60 stores in two years, hitting 3,000 jobs in the UK and Ireland.
Kingfisher notched up like-for-like sales growth of 2.4% at its DIY chain in the quarter to October 31, fuelled by strong sales of outdoor seasonal goods and building products.
Its Screwfix arm raced ahead over the same period, with store sales up 13.3% thanks to strong growth in the housing market.
Its UK and Ireland retail profits rose 14.2% to £80m in the third quarter.
But its French business - where it trades as Castorama and Brico Depot - continued to struggle, as weak consumer confidence and declines in the housing and construction markets saw sales edge just 0.1% higher.
The weakness of the euro against the pound also compounded its woes in France, with retail profits diving by 15.7% to £109m.
Analyst Kate Calvert at Investec said the returns for shareholders in the plan were "insufficient for the execution risk."
Ms Calvert added: "There are a lot of moving parts and no guarantee that all the costs will fall out and the profits come through."
Kingfisher also said that a former Amazon director, Rakhi Parekh, would join the Kingfisher board as a non-executive director from 1 February, with Janis Kong stepping down after nine years on the board.