The team is applying the guiding principle “progress iteratively with feedback,” so option C is correct. ITIL recommends moving in manageable steps rather than attempting to deliver everything in one large release. By releasing a small set of features first, the team reduces risk, gets faster learning, and avoids investing heavily in assumptions that may prove incorrect. Gathering user feedback allows them to refine priorities and make the next release more valuable and relevant. This principle is especially useful in complex or uncertain environments where needs may evolve and outcomes cannot be perfectly predicted in advance. While focus on value and collaboration are also important here, the clearest principle illustrated is iterative progress supported by feedback. It helps improve adaptability, responsiveness, and overall service quality.