Jose Mourinho's side are five points clear of second placed City and Ivanovic claims they are confident of extending that lead over the champions after a much-needed morale boost in the League Cup in midweek.
Stung by their humiliating FA Cup fourth round defeat against third tier Bradford last weekend, the Blues responded impressively by booking a League Cup final berth thanks to a 1-0 semi-final second leg win over Liverpool.
The victory was secured by Ivanovic's extra-time goal and the Serbia international celebrated by insisting the result was a sign Chelsea are ready to hit peak form in the crucial clash against City.
"We showed the real power of our team and in the end deserved to be in the final," Ivanovic said.
"We know we can improve and we'll improve in the next couple of games."
Ivanovic's bold declaration might not sound so threatening to City if Chelsea's star striker Diego Costa is suspended this weekend.
Costa is facing a three-match ban for his apparent stamp on Liverpool's Emre Can on Tuesday, although the Spain international has appealed the charge of violent conduct and a Football Association verdict is due by Friday.
Facing Chelsea without Costa would be a significant lift for City, who have struggled badly since influential Ivory Coast midfielder Yaya Toure departed for African Cup of Nations duty.
Toure's exit has coincided with a run of three games without a win for City, including damaging back to back home defeats against Arsenal in the league and then second tier Middlesbrough in the FA Cup
But City manager Manuel Pellegrini is adamant his players, including veteran midfielder Frank Lampard who is set for his first return to Chelsea since leaving the Bridge at the end of last season, are still confident of overhauling the Blues.
"I am concerned, not because of the Chelsea game, but because in the last two games at home we didn't score goals and we conceded two goals in each," he said.
"But we don't have any problem with motivation
I think we are going to work hard and I hope we can win at Stamford Bridge."
- Misfiring United -
A City defeat would offer encouragement to Southampton and Manchester United that they could leapfrog Pellegrini's team.
But third placed Southampton, five points behind City, host Swansea on Sunday with boss Ronald Koeman battling a growing injury list.
Already hit by injuries to Toby Alderweireld, Victor Wanyama, Morgan Schneiderlin, Sam Gallagher and Jay Rodriguez, the Saints suffered another blow this week when Republic of Ireland striker Shane Long was ruled out for six weeks with fractured ribs.
United, sitting 12 points adrift of Chelsea in fourth place, need to get back on track against bottom of the table Leicester after failing to beat fourth tier Cambridge in the FA Cup last week.
That lacklustre display underlined United's problems in attack this season.
Dutch forward Robin van Persie has scored just once in his last six appearances and he lifted the lid on his team's frustration in some candid comments this week.
"Obviously we are not scoring enough goals, including me," van Persie said.
"Everyone feels responsible
I do, definitely
This year I have played something like 20 games and I have scored eight goals.
"I am not happy with that
I want to score more."
Liverpool manager Brendan Rodgers has no concerns about how Daniel Sturridge will fit into his redefined formation ahead of the striker's long-awaited comeback from injury.
Sturridge will be in Liverpool's squad for their Premier League clash against West Ham at Anfield, having not played for the Reds since the end of August with calf and thigh problems.
However, Rodgers reverted to a fluid 3-4-3 system during a lean spell of results in Sturridge's absence and Liverpool saw a marked improvement.
"We are very much built around the collective, but it doesn't half help when you have someone to finish it off at the top end of the field and have that power and pace that Daniel has," Rodgers said.
Saturday (1500 GMT unless stated)
Chelsea v Manchester City (1730 GMT), Crystal Palace v Everton, Hull v Newcastle (1245 GMT), Liverpool v West Ham, Manchester United v Leicester, Stoke v QPR, Sunderland v Burnley, West Brom v Tottenham
Arsenal v Aston Villa (1330 GMT), Southampton v Swansea (1600 GMT)
Source : AFP