A test for any resource or capability you think gives you an edge. It has to pass all four questions, in order, or it is not an advantage.
Where Porter looks outward at the industry, the resource-based view looks inward: advantage comes from what you own or can do that others cannot easily copy. VRIO is the test.
Valuable — does it let you exploit an opportunity or defend against a threat? If not, it is a cost, not a resource.
Rare — do few competitors have it? A capability everyone has is the price of entry, not an advantage.
Inimitable — is it costly for others to copy or substitute? This is where most claimed advantages die.
Organised — is the business actually set up to exploit it? Plenty of firms own something valuable, rare and hard to copy, and are not arranged to make money from it.
Fail Valuable and you have a disadvantage. Pass Valuable only: competitive parity. Add Rare: a temporary advantage. Add Inimitable: potentially sustained. Add Organised: sustained competitive advantage, actually realised.
The question that does the work is Inimitable. Equipment, software and a good product are all buyable. Reputation, accumulated relationships, deep specialist knowledge and a genuine culture are not, which is why they are the real answers.
Apply all four in order and say where the resource fails. Concluding 'sustained advantage' without testing imitability is the standard error.