Backed by their wealthy owners, City have spent a fortune on players including Sergio Aguero, David Silva and Carlos Tevez in recent seasons.
"Nobody can match their financial power, no one," Ferguson said in The Sunday Telegraph. "You have to accept that so we do it a different way. We have to look at younger players. It's been insane for a while, for a long time, and I think clubs like City create that."
He added: "We need to reassess the way we're going with that in terms of players."
Ferguson confirmed he would be looking to strengthen his squad in the summer.
"There's no doubt we'll be bringing players in," he said. "Maybe two or three, it depends on the kind of market we're dealing with."
Ferguson also admitted the ?80million United received from Real Madrid for Cristiano Ronaldo was starting to look like bad business.
"Real Madrid spent ?80 million on Ronaldo and the success he and the club has had justifies that," he said in the Sunday Express.
"They would have probably paid ?160 million if they knew they were going to get this.
"We had an agreement that he would be going after staying for another year. Never mind ?80 million I'm saying to myself now that it should have been ?800 million."
Source: PA
Source: PA