The Red Devils boss accepts that Roberto Mancini's side are bound to bring in more expensive players but maintains belief that nurturing young talent is the right way forward
The Scot narrowly missed out on securing back-to-back titles, after City secured a dramatic 3-2 victory at home to QPR, despite winning 1-0 against Sunderland at the Stadium of Light.
Roberto Mancini's side have invested heavily since Sheikh Mansour's takeover in 2008, with the likes of Sergio Aguero and Yaya Toure joining for hefty fees.
But Sir Alex, speaking at the club's Player of the Year awards dinner, said: "We invest in young players. That is what we are good at – we're not like other clubs who can spend fortunes on proven goods. We know that City are going to spend fortunes, pay stupid money, pay silly salaries and all that.
"We can't do anything about that. We concentrate on what we can do to try to bring players in for the right reasons.
"We invest in players who will be with the club for a long time, who will create the character of the club, who will create excitement for our fans, and we are very proud of that and we are going to continue that way."
Sir Alex continues to have faith in the system having seen his investments in Chris Smalling, Phil Jones and Javier Hernandez pay off.
The United coach also praised the experience at the club, singling Rio Ferdinand, in particular, out for praise.
He added: "We're good at it. If you are good at it then stick with it. We also have some maturity in the team.
"Rio is 33 but after that we have no issues. No issues at all. So yes we want to add to the squad and that is in process at the moment – we have set our stall in terms of certain players.
"And we want to make sure that the evolution continues at United because we are always talking about evolving a new team because I've been here for 25 years and I have to maintain a certain standard that keeps us there all the time.
"We don't always win the league but we always have to be there or thereabouts."