In recent years, the trend of coffee consumption has driven the rapid growth of the coffee shop industry in Bandung, Indonesia, including women-owned ones. However, this increasing number of coffee shop outlets has created competitive challenges for the business. It needs innovation in business strategy to cope with the challenges. It serves not only as a differentiator but also as a source of sustainability. This study seeks to investigate how business strategy affects competitive advantage, with the three innovation aspects of people, process, and product innovation acting as mediators. A quantitative method with purposive sampling was used, involving 83 coffee shop owners in Bandung. Data was collected using questionnaires and analyzed through inferential statistics. The findings indicate that business strategy exerts a direct effect on achieving competitive advantage about 33.8%. Moreover, process innovation significantly mediates this relationship around 54.9%, while product innovation significantly mediates around 49.7%. However, people innovation has a negative impact. Insight from this study provides a meaningful perspective on how innovation in supporting the sustainability of the coffee shop business.