Narratives or stories may:

be oral or written

be elicited, for example during an interview, or naturally-occurring

be very short or long

be told as a way to share one's biography (life stories)

focus on events and the meaning of those events for those experiencing them (e.g. oral histories; auto-ethnographies)

focus on the ordinary stories people tell as a way to share everyday experiences (e.g. Labov and Waletzy's work)

Narration includes story and discourse. Therefore narrative analysis makes use of these two. I agree with you that narrative analysis includes literature, diaries and folklore etc.

Kindly view these links for more illustrations.

http://repository.up.ac.za/bitstream/handle/2263/19003/VanDerBergh_Distinction(2008).pdf?sequence=2

http://www.keele.ac.uk/media/keeleuniversity/facnatsci/schpsych/documents/counselling/conference/5thannual/NarrativeApproachestoCaseStudies.pdf

http://www2.clarku.edu/~mbamberg/Material_files/NARRATIVE_ANALYSIS.pdf

I write this answer as someone in the field of Folklore and I know narrative analysis is very important in Folklore especially because it is the root of story telling among different groups of people. This is especially because our understanding of the world and imaginations we make of the world start with how we tell about that world. Analysing the narratives of say song or folk tales is an attempt to make sense of the communities we live in and to determine the directions to take in any further analyses say for example of point of view, voice, and the role of the narrator in each of these, especially if we struggle with determining whose voice we are listening to.

I also confirm the applications as I experienced in my readings.

Resp. Prof. Grover,

Yes, narrative analysis can help to analyze the literature.

Ayesha Perveen Madam,

Thanks for your valuable ideas.

Prabhat Ranjan Sir,

Thanks for giving links for Narrative Analysis.

Isaac Kiiza Tibasiima Sir,

Thanks for your opinion.

Hussin Jose Hejase Sir,

Thanks for your consent.

Palak Vyas Madam,

Thanks for your answer to promote me.

A very good question. Narrative " avoid revealing negatives about self": absolutely true. A challenge for narrative interviews in ethnography, for example. How involve the Other in our quest for truth and authenticity? Difficult answer... to quote nobel price Bob Dylan "negativity don't pull you through"...

Narrative Analysis was born to study folklore short stories. You should read Vladmir Propp, father of this kind of analysis

https://smile.amazon.com/Morphology-Folktale-Publications-American-Folklore/dp/0292783760/ref=sr_1_1?ie=UTF8&qid=1478571486&sr=8-1&keywords=propp

Rafael Duarte Oliveira Venancio Sir,

Thanks for giving link about Morphology of folklore.

Francesco Spagna Sir,

thanks for sharing views.

Another methodology in narratology that can interest you is Greimas' models. I recently published one article about this. I attached it here.

Article Narrative between Action and Transformation: A. J. Greimas' ...