Arsenal chief executive Ivan Gazidis has claimed that the club are doing all the right things to progress, but that it is "not just about spending money".
The North London outfit were criticised last summer for making just one signing - goalkeeper Petr Cech from Chelsea for £11m.
In the current transfer window, the Gunners have spent a reported £35m on sealing the signature of Granit Xhaka from Borussia Monchengladbach.
Arsenal's Premier League rivals Manchester United, Manchester City and Chelsea have already spent big money in the market, and reports are suggesting that the Red Devils could smash the transfer record with a £100m bid for Juventus midfielder Paul Pogba.
While Gazidis recognises that money needs to be spent in order to compete with the elite, he believes that "core philosophy and values" are just as important.
Arsenal have not won the league title since the 2003-04 campaign, and they failed to keep up their challenge last season as they finished second, 10 points behind champions Leicester City.
In an interview with ESPN, Gazidis said: "This approach, for us, gives us a very, very powerful balance because it's not just about spending money but about how you spend your money and doing it wisely.
"It's about having a strong core philosophy and values within the club that players buy into and our fans can be proud of. These are all things that lead to success, and when you look at Arsenal over the last four or five years, there's no question that the squad has been progressing in strength.
"We've got a squad now that we believe is capable of competing to win the premier league. We came in second last year, which was disappointing, but we're on the right track."
Arsenal's opening game of the season will be at home to Liverpool on August 14.
