ZephyrFit Pvt. Ltd., a startup founded by three young business graduates, launched a fitness app offering diverse wellness content, including…

(c) The corporate strategy adopted by ZephyrFit Pvt. Ltd. is a Divestment Strategy, which involves the sale or liquidation of a portion of business, or a major division, profit centre or strategic business unit (SBU). In this case, the company observed that certain regional wellness content, such as Kerala Ayurveda and Punjabi workouts, involved high costs and received low user engagement, making them financially unviable. As part of its restructuring plan, ZephyrFit decided to sell the rights to this content and halt further development in those areas. A divestment strategy may be adopted when a business faces persistent negative cash flows, severity of competition, or when there is a better alternative for investment. These conditions are clearly evident in the case, as the company shifted focus to more popular and cost-effective wellness content. The characteristics of divestment strategy also highlight that such a move should be seen as an integral part of corporate strategy and not with stigma, especially when the goal is to restore overall business viability. Thus, the decision by ZephyrFit aligns with the principles and rationale of a divestment strategy.