The BVB supremo claims the German champions are only out to sign their rivals' best players but has stressed his side will continue to try to strengthen their team
Bayern snatched Mario Gotze from BVB last summer and they recently announced that Robert Lewandowski will be the next Dortmund star to make the move to the Allianz Arena in June.
Watzke believes Bayern's dominance has turned the Bundesliga into a one-team championship race and claims Pep Guardiola's side simply want to stop the likes of Dortmund from ever becoming a threat in future.
"There is currently no other league that is dominated by one single club like Bayern in the Bundesliga. The situation is not like in the Spanish Liga, but is more like in the Scottish league," Watzke told reporters.
"Bayern are hitting back now [after Dortmund's two titles]. They want to destroy us to make sure we will never be a danger to them again.
"And they are doing so by signing our players.
"We don't stand a chance when our players can earn twice as much elsewhere. Despite everything, we will not change our strategy, though."
Watzke went on to stress that Dortmund will not hesitate to spend big at the end of the season in order to be ready to challenge Bayern again.
"We will invest again in the summer and we are not talking about small figures. We will do a lot during the summer.
"We'll see what we can get for the funds that we have available. We are looking to prove a point. There's wiggling room for an increase in our wage budget as well."
Bayern currently hold a 13-point lead over Bayer Leverkusen in the Bundesliga table, with Dortmund trailing by 17 points in third place.