Over the past two years, Arsenal have signed marquee names such as Germany midfielder Mesut Ozil and Chile winger Alexis Sanchez, but they have still spent less than many of their rivals.
In the current close-season, they have added Switzerland midfielder Granit Xhaka, striker Takuma Asano and defender Rob Holding to their ranks.
"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," Gazidis told ESPN.
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"We're making progress in what is a fiercely competitive world, against competitors that have the capability to spend far more money than we do.
"We're doing it by being very, very disciplined; spending money where we believe it makes a difference, but also giving young players a chance and believing in ourselves and our values."
Despite failing to win the title since 2004, Gazidis is certain the squad have been showing signs of improvement as they head into the new season looking to build on the two FA Cups they have won in the last three years.
"When you look at Arsenal over the last four or five years, there's no question that the squad has been progressing in strength," Gazidis said.
"We've got a squad now that we believe is capable of competing to win the Premier League. We're on the right track."
Arsenal begin their new campaign on Aug. 14 against Liverpool at the Emirates Stadium.
(Reporting by Shravanth Vijayakumar in Bengaluru; Editing by Toby Davis)
